HSBC raises target price on Eicher Motors but maintains hold as export outlook remains unclear
By Markets Desk Published on June 20, 2025, 07:32 IST
HSBC has maintained a 'Hold' rating on Eicher Motors, even as it raised the target price to ₹5,600 from ₹5,300, citing sustained growth momentum from Royal Enfield's (RE) premium segment offerings and stable competitive dynamics. However, concerns over the company's export trajectory remain a limiting factor in driving further upside.
According to HSBC, the competitive intensity in the domestic two-wheeler market continues to be benign, particularly in the mid-to-premium motorcycle space where Royal Enfield commands a dominant share. The bank sees structural tailwinds for RE from its successful 350cc platform refreshes, along with strong reception to models like the Hunter, Super Meteor, and Himalayan 450.
On the export front, HSBC acknowledged pockets of stabilisation in Latin America, a key geography for RE's overseas business, but noted that overall visibility on international growth remains unclear. Slowing demand in mature Western markets and currency pressures in Africa and Southeast Asia continue to weigh on near-term expectations.
At its current valuation, the stock is trading at 26x FY27 estimated earnings, which HSBC views as fair, considering the company's robust brand positioning but limited near-term triggers. The brokerage believes that while RE's domestic momentum can continue, upside beyond this level will require a clear revival in exports and operating leverage from new geographies.
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