Eicher Motors Q1 Results Review - Superior Mix Drives Up Margin Despite Limited Growth: ICICI Securities

ICICI Securities Report

Eicher Motors Ltd. continued to deliver 27%+ standalone Ebitdam for fourth quarter in a row in Q1 FY25, this time at 27.9%, up 30 basis points QoQ (versus our estimate of 27.4%). Margin increase QoQ despite flat volume was led by superior mix as blended average selling price was up ~1% QoQ.

With volume growth likely to remain ~7%, we believe additional driver for Ebitda growth would be rise in ASP as 450cc/650cc model mix is set to rise, other than exports revival on a low base.

We are building in ~0.94 million/1.04 million units for FY25/26E with mean Ebitdam of ~27.7%. Maintain Add with DCF-based revised target price of Rs 4,827 (earlier Rs 4,892), implying ~26 times FY26E earnings per share.

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