Eicher Motors has received a rare double upgrade from Kotak Institutional Equities, with the brokerage turning more constructive on the Royal Enfield maker amid improving demand, premiumisation trends and the prospect of a new 250cc motorcycle platform.
Kotak upgraded the stock to 'Add' from 'Sell' and raised its fair value to Rs 7,950 from Rs 6,500, saying multiple growth drivers are now falling into place.
The brokerage believes near-term demand momentum remains robust, supported by GST rate cuts, new model launches across the industry and rising disposable incomes that continue to shift buyers toward premium motorcycles. Royal Enfield remains the biggest beneficiary of this trend, with an estimated 85-90% share in the premium motorcycle segment.
Kotak also expects fresh production capacity coming online and lean dealer inventories to support stronger volume growth over the coming quarters.
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Future Outlook
Beyond the near term, the brokerage sees a long runway for expansion as premium motorcycle adoption spreads beyond affluent urban markets into underpenetrated states. It expects the premium motorcycle segment to grow at a 10% CAGR between FY26 and FY40, significantly ahead of the broader industry's projected 3-4% growth.
Another key catalyst, according to Kotak, is Royal Enfield's expected entry into the 250cc segment. The brokerage believes a new platform positioned below the Hunter 350 could help attract younger buyers and widen the company's addressable market. It estimates the new category could add 5-6% to FY29 volumes, creating another leg of growth.
Reflecting the stronger outlook, Kotak has increased its FY27-FY29 consolidated EPS estimates by 5-7%, driven by higher volume assumptions.
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