Eicher Motors may see 21% upside; analysts see strong near-term growth momentum

Eicher Motors shares will be in focus on Wednesday, February 11, after the company reported a strong set of third-quarter FY26 results a day earlier and brokerage Jefferies reiterated its Buy rating with a target price of ₹8,800.

The results, which beat Street estimates, prompted Jefferies to maintain its positive stance, highlighting robust EBITDA and profit growth along with an improved outlook for Royal Enfield.

The brokerage’s target price of ₹8,800 implies a potential upside of 20.7% from the current trading level of ₹7,290.50.

For the December quarter, Eicher Motors reported a consolidated net profit of ₹1,420 crore, up 21.3% year-on-year. Revenue rose 23% YoY to ₹6,114 crore, while EBITDA climbed 29.6% YoY to ₹1,556.5 crore. EBITDA margin expanded to 25.5%, compared with the Street’s expectation of 24.7%.

The brokerage said EBITDA and profit growth for the December quarter were in line with its expectations. Royal Enfield volumes rose 21% YoY during the quarter, while EBITDA margins expanded by 170 basis points sequentially to a six-quarter high.

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Jefferies added that volume growth has accelerated to 25% year-to-date in FY26, pointing to the company’s plan to expand capacity by 67% over the next two years.

It expects Royal Enfield to benefit from the rising two-wheeler demand and premiumisation, adding that the toughest phase of competition and margin pressures appears to be behind. Jefferies has raised its FY27-FY28 earnings per share estimates by 3-4%.

HSBC

HSBC also maintained a Buy rating with a target price of ₹8,200, citing strong operating performance in Q3. The brokerage said Eicher continues to prioritise volume growth over margin expansion and expects Royal Enfield to increase annual capacity to 2 million units in a phased manner by FY28, from around 1.2 million units currently.

HSBC believes Eicher’s growth trajectory, which is better than the broader industry, justifies a premium valuation, though it flagged potential margin headwinds from commodity cost inflation.

CLSA

CLSA retained its Outperform rating with a target price of ₹8,066, noting that standalone EBITDA margin came in at 26.6%, nearly 200 basis points above its estimate, aided by a richer product mix, value engineering and the lag effect of earlier price hikes.

CLSA said Eicher is well placed for near-term growth driven by strong domestic demand, premiumisation and refresh launches. It also remains positive on the commercial vehicle cycle for VE Commercial Vehicles.

Citi

Citi reiterated its Buy call with a target price of ₹8,300, saying Q3 margins surprised positively due to price hikes, value engineering and operating leverage.

The brokerage firm said management commentary pointed to a sharp pickup in footfalls, bookings and conversions following GST cuts, and highlighted the announced capacity expansion from 1.45 million units to 2 million units by FY28, involving capex of about ₹9.58 billion over two years.

It also said that the company’s 450cc and 650cc portfolio is steadily recovering from the negative impact of the GST hike.

As per Bloomberg data, Eicher Motors has a consensus rating of 3.76, with about 61% of analysts recommending ‘Buy’, 26.8% ‘Hold’, and 12.2% ‘Sell’. The consensus 12-month target price stands at about ₹7,666, which is a 5% upside from the stock's last traded price of ₹7,290.50.

Shares of the company closed 1.32% higher ahead of the Q3 results announcement on Tuesday. The stock has gained 28.55% in the past six months.