Eicher Motors - A Multibagger stock for 2019 - Super Multibaggers

Eicher Motors – A Multibagger stock for 2019

Eicher Motors – Much more to achieve

Here I am sharing the research work on the Eicher Motors, an excellent company, multibagger stock for 2019 and market leader in its space. If you want, you can watch my video at

Background

Incorporated in 1982, Eicher Motors (EIM) is the flagship company of the Eicher Group in India and a leading player in the Indian motorcycle and commercial vehicle (CV) segments.

Eicher Motors Limited, the oldest motorcycle company in India and in continuous production of luxury and high end motor cycles in India. One of its subsidiary company, Royal Enfield made its first motorcycle in 1901.

 

Manufacturing and Joint Ventures

With modern development facilities in Leicester shire, UK and Chennai, India, Royal En field makes its motorcycles in Tamil Nadu.

Eicher Motor has a joint venture with Sweden’s Auto giant AB Volvo – Volvo Eicher Commercial Vehicles Limited (Volvo Eicher) – which is driving modernization in India’s commercial vehicle space, and in other developing countries.

Volvo Eicher has a complete range of trucks and buses from 5-49 tones, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-liter engines for Volvo Group.

 

Since 2012, Eicher has an equal joint venture with US-based Polaris Industries Inc – Eicher Polaris Private Limited – and introduced the Multix 3-in-1 vehicle, purpose built for the independent businessman.

 

Market leader position in 250 CC two wheeler segment

 

Company is a market leader in the >250 cc motorcycle segment with over 95% market share. It is the only company who is earning most of its revenue from luxurious bikes in India and if you compare it with other two wheeler manufacturers you will find that is has successfully targeted a deep niche by offering such high end products. Other companies still far behind in penetrating this market.

 

Recently launched the Himalayan Sleet variant has helped spurred the Himalayan brand, which has started to grow now and future is looking very bright for Himalayan brand.

 

Company has posted that that is has positively surprised by response to Gunmetal Grey variant they have received during past 1-2 quarters.

 

Dealership

Company has 825 dealers in India as of March 2018. Dealer count expected to increase by ~100 for FY19.

In International markets, company has 36 exclusive dealers and 540 dealerships overall including multi brand outlets. Company is looking to add 25-30 exclusive stores over the next two years.

Multi-brand outlets: RE has created a full new retail identity–shop–in-shop concept providing look and feel.

Future prospects – A Multibagger Stock for 2019 

Future prospects are looking brighter for the company on account of higher demand, regularly increasing household income and brand awareness in the society. During next few years Company will put in much more energy behind Thailand & Indonesia – most ripe for export growth story.

Royal Enfield’s market share in UP was minuscule and should continue to see growth. UP was No. 1 market for a month in the fourth quarter of the year 2017-18, which was a positive surprise. It is quite understandable that for gaining most out of Indian market Company has to target dense areas like UP, bihar, Maharashtra etc.

 

New capex

Company has great focus on Research and development for developing more competitive products and further enter deep into Indian roots. Recently company has informed that their new Chennai tech centre will be ready by FY19 end which will help them develop excellent products in future.

Company will start on phase 2 of Vallam Vadagal plant, leading to INR8 bn of capex and production of 950k units for FY19.

Company has lined up many more capex infusion plans basis on which Company will continue to grow with tremendous pace for next 5-7 years at least.

 

Note: The above information is based on my personal research and the all the information has been gathered from different sources available on the public platform. the information is for education purpose only and the author shall not be responsible for incorrectness of any of the above information or market related losses of any Investor as all Investors should do their complete research before doing any financial transaction.

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