MOSL: EICHER MOTORS (Buy)-Gearing up for a ride to under-penetrated states-BS6 upgrades would bridge product quality gaps
Eicher Motors: Gearing up for a ride to under-penetrated states; BS6 upgrades would bridge product quality gaps
(EIM IN, Mkt Cap USD7.9b, CMP INR20075, TP INR23500, 17% Upside, Buy)
Eicher Motors (EIM) engaged in a dialogue with the investing community at the UK Technology Centre (started operations in May-17), where entire senior management of the motorcycle and CV businesses presented on their strategy and focus areas (). Throughout the discourse, management did not appear perturbed by the ongoing demand slowdown for Royal Enfield (RE) as they looked at it as a cyclical and industry wide phenomenon. In fact, the company continues focusing on upping its game on product quality, distribution and brand strength. At the same time, it would attempt to capitalize on the continued premiumization trend in developing markets (including India). Key highlights from the meet:
- New CEO Mr Vinod Dasari will bring complementary skillsets and help Mr Siddhartha Lal fill gaps in the hitherto weak areas. While Mr Lal would focus on product development and brands, Mr Dasari’s emphasis would be on the front end (expanding market and driving demand) apart from managing day-to-day operations.
RE is focused on expanding the middle weight motorcycle segment (250-750cc) and looking to capture share of the motorcycle market and not just of the category. Its ambition is based on the premiumization trend and the target is to grow 2x of the industry over the next 10 years. In exports, it intends to replicate the India story in the next 10-15 years.
Eicher Motors is engaged in the Indian automobile industry. Its 50-50 joint venture with the Volvo group, VE Commercial Vehicles Limited, designs, manufactures and markets reliable, fuel-efficient commercial vehicles of modern technology, engineering components and provides engineering design solutions. Co. manufactures and markets Royal Enfield motorcycles and exports its bikes to over 25 countries including developed countries such as U.S., Japan, U.K. and several European countries. Co.'s business activities fall within a single business segment, automobile products and related components.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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