Shares of Eicher Motors, manufacturer of motorcycle iconic brand Royal Enfield, hit an over four-year high of Rs 3,179.15, as the stock gained 3 per cent on the BSE in Friday’s intra-day trade on healthy demand outlook. The stock has been gaining momentum on expectation of a strong pick-up in demand amid new launches during upcoming festive season.
The stock of the automobile company, engaged in the manufacturing of motorcycles and commercial vehicles, was trading at its highest level since April 2018. It was near its record high level of Rs 3,348, hit on September 8, 2017. In the past one month, Eicher Motors has outperformed the market by surging nearly 20 per cent, as compared to 7.8 per cent rise in the S&P BSE Sensex.
Eicher Motors’ total motorcycles (Royal Enfield) sales soared 43 per cent to 61,407 units in June 2022 as against 43,048 units sold in the same period last year. While sales of motorcycle models with engine capacity up to 350 cc rose by 35 per cent year on year to 50,405 units, sales of motorcycle models with engine capacity exceeding 350 cc surged 90 per cent to 11,002 units in June 2022 over June 2021.
In April-June quarter (Q1FY23), the company’s total motorcycles sales rose 51 per cent to 187,205 units as against 123,640 units in Q1FY22. The two-wheeler demand picked up QoQ in Q1 and driven by pick-up in rural sales on the back of improved crop prices and opening up of schools and colleges.
“For Royal Enfield, with supply constraints having eased considerably, all their models are now available at most dealers with minimal waiting period. As per dealers, Royal Enfield is preparing for a strong launch pipeline, with a new model launch every quarter, subject to supply availability,” analysts at HDFC Securities said in a sector report.
“Royal Enfield supply constraints are now over, with all dealers confirming that they are receiving models as required. However, we got a mixed feedback on demand across key regions that we checked in. Most dealers agreed that Royal Enfield has a very healthy product pipeline in place and is now gearing up for one new product launch each quarter. The next product launch expected is the Hunter350cc, which is likely to be positioned between Classic350 and Bullet 350,” the brokerage firm said.