Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price Post Q3 Results

Eicher Motors’ shares dropped nearly 7% after Goldman Sachs lowered its target price to ₹5,900, citing higher marketing costs and regulation-driven price hikes. Despite record sales at Royal Enfield and strong VECV performance, Q3FY25 net profit rose 18% YoY to ₹1,170 crore, slightly below estimates. The company remains optimistic about future growth, focusing on product diversification and electric mobility advancements.

CONTENTS:

• Eicher Motors Shares Decline 7% as Goldman Sachs Lowers Target Price Post Q3 Results
• Eicher Motors Q3 Results: Net Profit Rises 17.5% YoY to ₹1,170.5 Crore, Slightly Below Estimates

Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price Post Q3 Results

Eicher Motors Shares Decline 7% as Goldman Sachs Lowers Target Price Post Q3 Results

Shares of Eicher Motors, the parent company of Royal Enfield, fell nearly 7% in intra-day trading on February 11, 2025, following the announcement of its Q3FY25 results and a target price revision by Goldman Sachs.

Goldman Sachs maintained its ‘Buy’ rating on the stock but lowered its target price to ₹5,900 from ₹6,000, indicating a potential 12.5% upside from the previous close. While the brokerage acknowledged that Eicher Motors’ Q3 performance met expectations, it cut its FY25-27 EPS estimates by 5.4%, citing higher marketing expenses and regulation-driven price hikes affecting the company’s pricing structure.

Q3FY25 Performance Overview: Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price

• Net Profit: ₹1,170 crore (18% YoY increase)
• Revenue: ₹4,888 crore (19% YoY growth)
• EBITDA: ₹1,201 crore (10% YoY increase)

VE Commercial Vehicles (VECV) Segment: Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price

• Revenue: ₹5,801 crore (6% YoY increase)
• EBITDA: ₹509 crore (16% YoY growth)
• Profit After Tax: ₹301 crore (44% YoY rise)
• Sales Volume: 21,012 vehicles, marking its highest-ever quarterly sales

Despite a sluggish commercial vehicle industry, VECV demonstrated resilience and gained market share.

Royal Enfield Sales: Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price

Royal Enfield achieved its highest-ever quarterly sales volume, selling 269,039 motorcycles, a 17% YoY increase from the 229,214 units sold in Q3FY24. CEO Govindarajan attributed the success to strong operational strategies and preparation for key product launches, particularly during India’s festive season.

Stock Performance

• Intra-day low: ₹4,966.15 (down 6.8%)
• Current price: Over 10% below its all-time high of ₹5,551.75 (recorded on Feb 4, 2025)
• 52-week low: ₹3,675.00 (March 2024)
• YoY gain: 39%
• February 2025: Down 1% so far, after an 8% surge in January

Management Outlook: Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price

Managing Director Siddhartha Lal expressed confidence in Eicher Motors’ trajectory, highlighting strong product diversification and market resilience. He remains optimistic about the company’s future performance in both motorcycle and commercial vehicle segments.

While the marketing cost surge has affected short-term EPS estimates, volume momentum is expected to continue in Q4, driven by sustained demand and strategic market expansion.

Eicher Motors Q3 Results: Net Profit Rises 17.5% YoY to ₹1,170.5 Crore, Slightly Below Estimates

Eicher Motors announced its financial results for the third quarter of FY25, reporting a 17.5% year-on-year (YoY) increase in net profit to ₹1,170.5 crore, marginally missing Moneycontrol’s projections. The company’s revenue from operations surged 19% YoY to ₹4,973.1 crore, while EBITDA grew 10% to ₹1,201 crore.

The positive performance was fueled by record-breaking sales at Royal Enfield and consistent growth at VE Commercial Vehicles (VECV), despite headwinds in the commercial vehicle sector.

Stock Market Reaction
Ahead of the earnings announcement, Eicher Motors’ stock closed 0.69% lower at ₹5,335.35 on the NSE on Monday.

Royal Enfield Achieves Record Sales

Royal Enfield registered its highest-ever quarterly sales, delivering 2,69,039 motorcycles, marking a 17% YoY increase. Meanwhile, VECV also achieved its best-ever third-quarter figures in terms of volume, revenue, and profit, selling 21,012 units.

Managing Director Siddhartha Lal credited the strong festive season sales and the launch of the company’s electric vehicle brand, Flying Flea, for the growth. He reaffirmed that Eicher Motors is well-positioned to cater to the evolving preferences of global riders.

Royal Enfield CEO B. Govindarajan noted that steady demand, coupled with new product launches and operational enhancements, contributed to the company’s robust performance. The Hunter 350 model surpassed 5 lakh unit sales, and the brand expanded its international footprint by establishing its first fully owned CKD (Completely Knocked Down) facility outside India in Thailand, strengthening its position in the Asia-Pacific market.

VECV Continues to Expand Despite Market Challenges

Eicher’s commercial vehicle arm, VECV, recorded a 6% YoY increase in revenue to ₹5,801 crore. EBITDA climbed 16% to ₹509 crore, while net profit saw a significant 44% jump to ₹301 crore. Vinod Aggarwal, MD and CEO of VECV, emphasized that despite a sluggish commercial vehicle industry, VECV managed to expand its market share across various segments.

Focus on Electric Mobility: Eicher Motors Shares Drop 7% After Goldman Sachs Cuts Target Price

Eicher Motors is advancing its electric vehicle strategy through its Flying Flea brand. The company is collaborating with Qualcomm Technologies to incorporate next-generation connectivity features into its upcoming electric motorcycles, offering real-time diagnostics, navigation, and personalized ride settings.

These results reaffirm Eicher Motors’ strong foothold in both the motorcycle and commercial vehicle markets, with continued innovation and expansion driving its growth trajectory.