Shares of Eicher Motors were under pressure on June 5 with foreign brokerage firm JP Morgan seeing a fall in stock price of the Royal Enfield manufacturer. JPMorgan has a target price of Rs 3,620 with a ‘neutral’ rating on shares of Eicher Motors. At 9:58 am, shares of the two-wheeler company were trading at Rs 3,683.8, down 0.4 percent on the BSE.

The brokerage firm highlighted that the management is cautiously optimistic on demand and does not see production constraints. Meanwhile, the company expects raw material inflation to largely be flat going forward, JP Morgan noted.

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New overseas plant

On Friday, in the last hour of trading, the Royal Enfield manufacturer informed the bourses about commencement of operations at its fifth CKD facility overseas in Nepal, with an annual capacity of 20,000 units, and that it will begin with local assembly of the new Classic 350 and the SCRAM 411 for its respective domestic market.

This is Eicher Motors’ fifth CKD facility in three years amid its aspiration of attaining approximately 10 percent market share in global mid weight segment, according to ICICI Securities. Pre-Covid motorcycle market in Nepal was pegged at around 17 lakh units per annum, with almost 60-65 percent of that being motorcycles sold in the above 150 cc premium segment–potential Royal Enfield customers.

Further, this will aid the company in improving international volumes, which were at about 1 lakh units in FY23 as compared to around 21,000 units in FY19, the brokerage firm pointed out.

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