Shares of Eicher Motors climbed almost 2% to hit their 52-week high of ₹3,088 in intraday trade on BSE on July 19. The stock ended 1.40% higher at ₹3,077.70, extending the gains into the third consecutive session.
The stock has been gaining this year while the market has been volatile. As of July 18 closing, the stock has gained 17% against a 15% gain in the BSE Auto index and a 6% fall in the benchmark Sensex.
Eicher Motors is a largecap automobile company, parent of Royal Enfield. Besides, Eicher has a joint venture with Sweden’s AB Volvo named Volvo Eicher Commercial Vehicles Limited (VECV) which makes trucks and buses.
MintGenie talked to experts to understand the fundamental and technical factors behind the stock's rise and if the stock is poised for more upside. Here's what they said.
Fundamental views
Arijit Malakar, Head of Research - Retail, Ashika Group
Eicher motors Q4FY22 numbers came in line with the consensus estimates as the good performance of Royal Enfield negated the weak performance of VECV. RE Classic 350 based on the new J platform gained good traction in the international market with Himalayan and scram created a new category of budgeted adventure tourer bikes.
The company continues to dominate the over 250 cc segment with around 90% market share. The company is banking on export and the segment is already showing positive results by growing stupendously. With supply chain issues likely to ease post Q2FY23, the continued product portfolio expansion will aid domestic recovery and support ramp-up in exports.
Technical views
Mehul Kothari, AVP – Technical Research, Anand Rathi Shares & Stock Brokers
For more than a year; Eicher Motors has been consolidating in the range of ₹3,000–2,300. During the recent sessions; the stock has broken out from this range and has closed above the same. In addition, the stock has confirmed this breakout on the weekly scale too.
We are witnessing a price pattern which resembles a bullish flag on the monthly scale. So the above-mentioned technical evidence indicates that the stock is poised for a fresh upside in the coming months. For the medium term, the stock has the potential to reach ₹3,400–3,700. The bullish view would be negated below the ₹2,600 mark.
Akhilesh Jat, Category Manager - Equity Research, CapitalVia Global Research
Shares price of Eicher Motors rallied over 9% in July 2022 so far to hit a fresh 52-week high. The stock is trading in higher high and higher low formation and it is trading above its 21, 50 and 200-day exponential moving average. On the daily charts, it has been consistently maintaining its uptrend and can be seen trading in a rising channel.
Momentum oscillator RSI is headed upwards and it has been continuously sustaining above the centreline, standing at 67 suggesting more upside in the prices. Additionally, the MACD indicator is also sustaining above zero level with positive crossover.
Disclaimer: The views and recommendations made above are those of the individual analysts and not of MintGenie.
