Eicher Motors stock jumped over 8.3% today becoming the top performer in Nifty auto index which moved up 1%. The company hasnt seen such a big one-day gain since about 3 years ago
The market response follows B Govindarajanʼs (Royal Enfield CEO) talk with analysts where he shared some good news: the companys new premium bikes are selling well even after the Oct-Nov festive rush. Rural sales which make up 1/3rd of their business‚ are growing faster than city sales
Jefferies and other market-watchers think the hard times are done — Emkay even changed its rating from “sell“ to “buy“ (a rare three-step jump). Last year Hero MotoCorp and Bajaj Auto tried to compete by bringing in fancy Harley-Davidson and Triumph bikes; but that didnt hurt Royal Enfield as much as people thought
- TVS Motor shares went up 0.6%
- Hero stocks gained 1.5%
- Bajaj Auto moved just 0.1% higher
The company is now looking at different ways to boost sales — analysts think its smart to focus on selling more bikes instead of just making more money per bike. Nomura changed their mind about the stock; they now think Royal Enfield will sell 8.3% more bikes next year than they thought before (up from 5%)