Eicher Motors limited

Industry Profile  : Indian automobile industry is one of the largest and one of the most competitive in the world. In FY 15-16 production total was 23.96 million vehicle. The sector account for 7.1 per cent of  GDP of India out of which 81% is Two wheeler market. Indian automotive aftermarket is estimated to grow at around 10-15 per cent to reach US$ 16.5 billion by 2021 from around US$ 7 billion in 2016. It has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s Gross Domestic Product. Maruti in Car and Hero Moto corp is in Two wheeler market are leader. Passenger Vehicle holding 13% market. Maruti Suzuki expects Indian passenger car market to reach four million units by 2020, up from 1.97 million units in 2014-15. Mr Young Key Koo, Managing Director, Hyundai Motor India Ltd, has stated that India is a key market for the company, not only in terms of volumes but also as a hub of small products for exports to 92 countries. As many companies trying to increase revenue, rural Market is large for further growth. India is also being one of the leading exporter of automobiles and has strong export growth expectations for near future. In April-March 2016, overall automobile exports grew by 1.91 per cent. PV, Commercial Vehicles (CV), and Two Wheelers (2W) registered a growth of 5.24 per cent, 16.97 per cent, and 0.97 per cent respectively in April-March 2016 over April-March 2015. The industry has attracted Foreign Direct Investment (FDI) worth US$ 15.79 billion during the period April 2000 to September 2016, according to data released by Department of Industrial Policy and Promotion (DIPP).   Several automobile manufacturers, from global majors such as Audi to Indian companies such as Maruti Suzuki and Mahindra & Mahindra, are exploring the possibilities of introducing driverless self-driven cars for India.

Company Profile  :  The company was incorporated in 1982. It is one of the leading manufacturers of commercial vehicle. It has manufacturing facilities located in Madhya Pradesh, Tamil Nadu, Maharashtra, and Haryana. the company is also manufacturer of Famous Royal Enfield. It manufacturer six different models of Royal Enfield. the company also manufacturar various kind of auto parts and gears.

Shareholding Pattern  :  Promoter holds 50.58% Mutual Funds hold 3.89%. Bank and FI holds 0.14%. Foreign investors hold 32.45%. Remaining is held by public.

Financials and Ratios  : 

 December 2010December 2011December 2012December 2013December 2014March 16March 17
Revenue497.02748.231,095.041,782.573,147.526,366.277,265.28
Net profit 75.44124.55144.76278.62558.921,229.851,560.02
NPM17.0618.5413.7916.3618.4319.8722.16
EPS284653.31102.58205.37451.54572.17
Book Value169.51200.09232.98303.75455.23791.891,441.60
Dividend per share1116203050100100
Dividend payout39.2734.6737.3029.1124.2422.0822.08
ROE16.5123.0623.0133.9245.3057.1839.77
ROCE16.1722.4222.3432.8443.9355.3538.34
ROA11.7915.9114.1318.7825.0735.9828.25
Debt to equity0.040.030.03000.010
Asset turnover69.1285.82102.44114.78135.99181.04127.45

Future Prospects  :  Royal Enfield ,the brand due to which this stock is running, is not showing any sign to stop or slowing down sales. Due to share price, the stock is not right for trade and that is what making it less liquid. one thing is sure that demand for Bullet will always there whatever you may call it and the profit margin the company is earning over Bullet is attractive and so the sky is the limit for stock price, if valuations support.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter