Eicher Motors (EICMOT)images.moneycontrol.com/static-mcnews/2020/06/Eicher-Motors-15… · | Eicher...
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ICIC
I S
ecurit
ies –
Retail E
quit
y R
esearch
Result
Update
June 13, 2020
CMP: | 16,860 Target: | 18,070 (7%) Target Period: 12 months
Eicher Motors (EICMOT)
HOLD
Muted margins, valuation steadily inching near mean
Eicher Motors (EIL) reported a muted Q4FY20 performance. Consolidated
revenues were at | 2,208 crore (down 12% YoY), with ASPs for Royal Enfield
(RE) at | 1.33 lakh/unit (up 3.5% QoQ) while sales volumes were at 1.6 lakh
units, down 17% YoY. EBITDA margins were at 19.6% (down 540 bps QoQ),
with subdued performance attributable to increase in all overhead costs as
proportion of sales. Consequent consolidated PAT was at | 304 crore, down
44% YoY. The company’s board of directors approved sub-division of equity
shares from face value of | 10 to | 1 i.e. split in the ratio of 1:10, subject to
approval in the ensuing AGM.
Brand RE undiminished; currently leads 2-W recovery
EIL’s RE franchise is undisputed market leader in >250 cc category with 96%
domestic market share as of FY20. Its brand loyalty, aspirational pull have
only gained strength in past decade (CY10-FY20 domestic volume CAGR
31.6%). We expect mass market/commuter motorcycle segment to be
among frontrunners of post Covid volume revival due to better income
stability in traditional user areas (rural, semi urban geographies), evolving
preference for personal mobility to serve social distancing needs.
Discretionary spend on higher ticket price items is likely to slow down in
current environment. However, EIL’s average daily retail sales in June, thus
far, are at ~43% of pre Covid levels, putting it ahead of other major domestic
2-W peers. A supportive factor for EIL may be its healthy exposure to states
with relatively higher per capita income (46% of 9MFY20 volumes from
Kerala, Maharashtra, Tamil Nadu, Punjab, Delhi, Karnataka, Haryana).
Nevertheless, we build in 20% volume fall in FY21E before 23% growth in
FY22E, with implied CAGR in FY20-22E at -1%.
Long road to margin recovery
The company’s current margin profile, while healthy, is far removed from
FY17-19 highs (~30%). Q4FY20 EBITDA margins were at a new low of 19.6%
that even post adjusting for one-offs were at ~22%. Expected volume
sluggishness in FY20P-22E is seen limiting operating leverage benefits,
further elongating the wait for a climb back towards earlier trajectory.
Moreover, persistent weakness in CV space is set to weigh on net
profitability (EIL has 54.4% stake in VECV). Continued improvement in
traction for exports, increasing share of >350 cc products and benign
general commodity prices, however, could act as a small tailwind in times
to come. We build 21.6%, 23.8% margins in FY21E & FY22E, respectively.
Valuation & Outlook
For EIL, we factor in 3.7%, 1.5% sales, PAT CAGR in FY20P-22E. We like EIL
for its dominant market position, robust financials i.e. net cash positive B/S
(~| 6,800 crore), double digit return ratios (~20% RoCE). Still, recent stock
price run up, limits upside, going ahead. Hence, we downgrade EIL from
BUY to HOLD valuing on SOTP basis at | 18,070 (26 P/E to RE; 15 P/E to
VECV on FY22E).
K ey F in an cials F Y18 F Y19 F Y20P F Y21E F Y22E C AG R (F Y20P -22E )
Net S a les 8,965.0 9,797.1 9,153.6 7,925.3 9,852.8 3.7%
E B ITD A 2,807.6 2,903.1 2,180.3 1,711.1 2,341.2 3.6%
E B ITD A Margins (% ) 31.3 29.6 23.8 21.6 23.8
Net P rofit 1,959.7 2,202.8 1,827.5 1,350.6 1,883.5 1.5%
E P S (₹) 718.9 808.1 670.4 495.4 690.9
P /E 23.5 20.9 25.1 34.0 24.4
R oNW (% ) 29.9 24.8 18.3 12.2 14.9
R oC E (% ) 39.1 32.5 22.5 15.9 19.1
Key Financial Summary
Source: ICICI Direct Research, Company
Particulars
Price chart
Key Highlights
Muted performance in Q4FY20. RE
volumes for quarter were down
17% YoY to 1.6 lakh units. ASPs,
however, improved 6% YoY to
| 1.33lakh/unit. Consequent topline
decline limited to 12% YoY
Margins at new low of 19.6% with
increase in all overhead costs
Studio format stores count ries to
600+ as of FY20 end with EIL aiming
to add similar number in FY21E
Recent stock price run-up leaves
limited upside potential.
Downgrade from BUY to HOLD with
revised TP of | 18,070 using SOTP
valuation methodology
Research Analyst
Shashank Kanodia, CFA
Jaimin Desai
P articu lar ₹ cro re
Marke t C apita liza tion 45,960
Tota l D ebt (F Y20P ) 171
C ash & Investments (F Y20P ) 6,807
E V (F Y20P ) (₹ crore ) 39,324
52 week H /L (₹) 23,428 / 12,460
E quity capita l ₹ 27.3 C rore
F ace va lue ₹ 10
0
5,000
10,000
15,000
10000140001800022000260003000034000
Jun
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Dec
-17
Jun
-18
Dec
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Jun
-19
Dec
-19
Jun
-20
Eicher Motors (LHS) Nifty (RHS)
ICICI Securities | Retail Research 2
ICICI Direct Research
Result Update | Eicher Motors
Exhibit 1: Variance Analysis
Source: Company, ICICI Direct Research
Exhibit 2: Change in estimates
Source: Company, ICICI Direct Research
Exhibit 3: Assumptions
Source: Company, ICICI Direct Research
Q4FY20 Q4FY20E Q4FY19 YoY (%) Q3FY20 QoQ (%) Comments
Total Operating Income 2208 2147 2500 -11.7 2371 -6.9Topline came in marginally ahead of estimates tracking
beat on ASP's
Raw Material Expenses 1176 1143 1282 -8.3 1242 -5.3
RM costs came in higher by 190 bps QoQ on account
of higher share of BS-VI variant dispatches and cost
pass through led increase in pricing of BS-VI variants
Purchase of traded goods 68 43 53 27.8 48 40.4
Employee Expenses 214 171 171 25.1 185 15.7Employee costs for the quarter came in substantially
higher and was by 190 bps QoQ
Other expenses 319 275 310 2.9 304 4.7
EBITDA 432 515 685 -36.9 592 -27.0
EBITDA Margin (%) 19.6 24.0 27.4 -781 bps 25.0 -540 bpsEBITDA margins came in at a new low of 19.6%
tracking increase in all overhead costs as a % of sales
Other Income 143 115 143 0.3 135 6.3
Depreciation 109 94 81 34.2 95 14.4
Interest 6 1 2 158.4 4 29.8
Total Tax 142 135 275 -48.1 145 -2.0 Tax rate for the quarter came in higher at 31%
PAT 304 411 545 -44.1 499 -38.9
Key Metrics
Royal Enfield ASP(₹) 132,864 130,884 125,366 6.0 128,318 3.5
ASPs for RE came in higher at ₹ 1.33 lakh/unit tracking
increasing share of BS-VI variant dispatches in overall
product mix
VECV ASP (₹ lakhs) 18.1 16.3 15.3 18.4 17.1 5.5
Comments
(₹ Crore) Old New % Change Old New % Change
Revenue 7,816 7,925 1.4 9,700 9,853 1.6
Broadly maintain topline estimates for FY21-22E. We
expect EIL to clock Sales CAGR of 3.7% over FY20-22E,
largely led by BS-VI led increase in ASPs with volume
CAGR at -1% in the same period
EBITDA 1,779 1,711 -3.8 2,414 2,341 -3.0
EBITDA Margin (%) 22.8 21.6 -118 bps 24.9 23.8 -112 bps
Lower than anticipated operating margins in Q4FY20 amid
disproportionate increase in employee costs leads us to
downward revise our margin estimates for FY21-22E
PAT 1,454 1,351 -7.1 1,969 1,883 -4.3
EPS (₹) 533 495 -7.1 722 691 -4.3
Downward revision in margin estimates leads to downward
revision for EPS estimates for FY21-22E (4%-7%). We
expect EIL to clock PAT CAGR of 1.5% over FY20-22E
FY21E FY22E
Comments
FY18 FY19 FY20P FY21E FY22E FY21E FY22E
Royal Enfield
volumes
820,121 826,098 695,839 556,342 681,827 557,558 682,108
Broadly maintain volume estimates for RE.
We build in 20% volume decline in FY21E
before 23% growth in FY22E, with implied
CAGR over FY20-22E at -1%
Royal Enfield
ASP/unit (|)
111,785 117,603 129,465 141,323 143,360 139,210 141,218
VECV volumes 66,233 72,860 48,786 38,930 48,866 39,156 46,856
For CV volumes at VECV, we build in 20%
volume decline for FY21E and 25% volume
growth in FY22E with implied CAGR flat over
FY20-22E
EarlierCurrent
ICICI Securities | Retail Research 3
ICICI Direct Research
Result Update | Eicher Motors
Conference Call Highlights
Demand, management outlook and guidance
EIL’s bookings have reached near pre-Covid levels. North and south regions are
better placed than others while Western India is a laggard at the moment
The company is currently operating at ~40% capacity utilisation levels.
Total ~90% of company’s dealership are now open
Supply chain at EIL is not fully secured yet
BS-VI models formed >60% of Q4FY20 retail sales.
Revenues, costs and margins
Q4FY20 profitability was impacted by one offs worth ~| 50 crore (~200-250 bps)
from provision made for certain brake calliper related recalls and currency volatility
related to Latin American markets
During Q4FY20, VECV clocked revenues of | 2,101 crore, with EBITDA at | 38 crore
(down 86% YoY) and ensuing PAT amounting to a loss of | 26 crore. For full year
FY20, net sales amounted to | 8,504 while EBITDA came in at | 409 crore (down
59% YoY). FY20 PAT stood at | 58 crore (down 88% YoY). CV demand recovery is
expected to delayed
EIL undertook a price hike of ~| 3,000/unit in April (at retail level). The company
has largely passed on BS-VI costs and costs + margins in some cases
Employee costs for the quarter came in higher at | 214 crore (up 25% YoY) on
account of ESOP costs attribution among others and is had no exceptional items.
On absolute count, total number of employees is on a decline at EIL
Others
EIL opened 100 studio stores in Q4FY20, taking the total count to over 600. The
company informed that studio store set up costs is 1/10th of large format stores. It
plans to add a similar number of studio stores (~600) in FY21E
Total large format stores in India as of FY20 end stood at 921, wherein company
added 6 stores in FY20
The company added 10 exclusive stores outside India during the quarter, with total
count now at 77. It is now present in 21 countries through these 77 stores as of
FY20 vs. presence in 18 countries with 42 stores as of FY19
Company has no unsold BS-IV inventory
FY21E capex outgo would be on broadly similar lines to FY20 (~| 500 crore),
however largely on product development side
First time and replacement buyers form ~10% and 5% of RE customers, with
predominant demand being upgrades in nature; the customers essentially looking
for more than just mobility
EIL plans to launch one new model every quarter
EIL as a strategy will remain in the mid-size premium bike category over next five to seven years
ICICI Securities | Retail Research 4
ICICI Direct Research
Result Update | Eicher Motors
Financial story in charts
Exhibit 4: Royal Enfield growth trajectory
Source: Company, ICICI Direct Research
Exhibit 5: VECV volumes
Source: Company, ICICI Direct Research
Exhibit 6: Return ratio profile
Source: Company, ICICI Direct Research
7,033
8,965
9,797 9,154
7,925
9,853 30.9
31.3
29.6 23.8
21.6 23.8
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
-
2,000
4,000
6,000
8,000
10,000
12,000
FY17 FY18 FY19 FY20P FY21E FY22E
%
₹ c
rore
Net Sales EBITDA Margin %
58,639
65,932
72,860
48,786
38,930
48,866
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
FY17 FY18 FY19 FY20P FY21E FY22E
units
VECV volumes
31.8 29.9
24.8
18.3
12.2 14.9
40.6 39.1
32.5
22.5
15.9 19.1
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
FY17 FY18 FY19 FY20P FY21E FY22E
%
RoE RoCE
We expect sales to grow at a CAGR of 3.7% over
FY20-22E on the back of -1% CAGR volume growth
during this period and increase in ASPs primarily on
account of BS-VI transition and improving product
mix
We factor in flat volume CAGR at VECV in FY20-22E.
We built a volume decline of 20% in FY21E and a
volume growth of 25% in FY22E
Eicher Motors expected to continue to clock healthy
return ratios; albeit with a downward bias
ICICI Securities | Retail Research 5
ICICI Direct Research
Result Update | Eicher Motors
Exhibit 7: Segment-wise, model-wise volume break up at RE for Q4FY20
Source: SIAM, ICICI Direct Research
Exhibit 8: Segment-wise volume break up at VECV for Q4FY20
Source: SIAM, ICICI Direct Research
Q 4FY19 Q 4FY20 Yo Y (%) Q 4FY19 Q 4FY20 Yo Y (%) Q 4FY19 Q 4FY20 Yo Y (%)
M o to rcycl es 1,89,372 1,55,110 -18.1% 6,790 7,760 14.3% 1,96,162 1,62,870 -17.0% 5.9
250-350cc 1,79,284 1,45,548 -18.8% 530 1,315 148.1% 1,79,814 1,46,863 -18.3%
Bullet 350 Tw inspark 38,391 22,723 -40.8% 4 - -100.0% 38,395 22,723 -40.8%
Bullet Electra Tw inspark 5,587 12,707 127.4% - 56 NA 5,587 12,763 128.4%
Thunderbird 350 14,695 3,265 -77.8% 267 84 -68.5% 14,962 3,349 -77.6%
Class ic 350 1,20,611 1,06,853 -11.4% 259 1,175 353.7% 1,20,870 1,08,028 -10.6%
350-500cc 5,874 5,294 -9.9% 2,551 2,715 6.4% 8,425 8,009 -4.9%
Class ic 500 2,222 322 -85.5% 782 1,004 28.4% 3,004 1,326 -55.9%
Bullet 500 420 61 -85.5% 72 280 288.9% 492 341 -30.7%
Thunderbird 500 407 1 -99.8% - - NA 407 1 -99.8%
Himalayan 2,825 4,910 73.8% 1,697 1,431 -15.7% 4,522 6,341 40.2%
500-800cc 4,214 4,268 1.3% 3,709 3,730 0.6% 7,923 7,998 0.9%
650 Tw in 4,214 4,268 1.3% 3,709 3,730 0.6% 7,923 7,998 0.9%
Continenta l G T - - NA - - NA - - NA
T o ta l d o m esti c 1,89,372 1,55,110 -18.1%
T o ta l exp o r ts 6,790 7,760 14.3%
G ra n d to ta l (2-W) 1,96,162 1,62,870 -17.0% 3.8
Do m e s tic Exp o r ts T o tal Do m e s tic
m ark e t
s h are (%)
FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%)
I. M & H C V 12,559 6,678 -46.8% 1,998 822 -58.9% 14,557 7,500 -48.5% 12.8
Passenger i.e . Bus 1,365 930 -31.9% 118 189 60.2% 1,483 1,119 -24.5% 9.2
G oods i.e . Trucks 11,194 5,748 -48.7% 1,880 633 -66.3% 13,074 6,381 -51.2% 13.7
II. L C V 5,284 3,477 -34.2% 780 326 -58.2% 6,064 3,803 -37.3% 2.9
Passenger 2,033 1,521 -25.2% 226 133 -41.2% 2,259 1,654 -26.8% 11.8
G oods 3,251 1,956 -39.8% 554 193 -65.2% 3,805 2,149 -43.5% 2.0
A . T o ta l VE C V - E i ch er (I + II) 17,843 10,155 -43.1% 2,778 1,148 -58.7% 20,621 11,303 -45.2% 6.0
B . T o ta l VE C V - Vo l vo 389 1,107 184.6% - - NA 389 1,107 184.6% 0.6
T o ta l d o m esti c 18,232 11,262 -38.2%
T o ta l exp o r ts 2,778 1,148 -58.7%
C . G ra n d to ta l (A + B ) 21,010 12,410 -40.9%
Do m e s tic Exp o r ts T o tal Do m e s tic
m ark e t
s h are (%)
ICICI Securities | Retail Research 6
ICICI Direct Research
Result Update | Eicher Motors
Exhibit 9: Segment-wise, model-wise volume break up at RE for FY20
Source: SIAM, ICICI Direct Research
Exhibit 10: Segment-wise volume break up at VECV for FY20
Source: SIAM, ICICI Direct Research
FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%)
M o to rcycl es 8,05,273 6,56,651 -18.5% 20,825 39,188 88.2% 8,26,098 6,95,839 -15.8% 5.9
250-350cc 7,64,012 6,14,626 -19.6% 3,789 5,270 39.1% 7,67,801 6,19,896 -19.3%
Bullet 350 Tw inspark 1,37,946 1,30,820 -5.2% 53 14 -73.6% 1,37,999 1,30,834 -5.2%
Bullet Electra Tw inspark 28,297 45,528 60.9% 51 111 117.6% 28,348 45,639 61.0%
Thunderbird 350 71,327 40,185 -43.7% 455 345 -24.2% 71,782 40,530 -43.5%
Class ic 350 5,26,442 3,98,093 -24.4% 3,230 4,800 48.6% 5,29,672 4,02,893 -23.9%
350-500cc 36,093 21,837 -39.5% 12,594 14,321 13.7% 48,687 36,158 -25.7%
Class ic 500 19,282 4,925 -74.5% 5,205 4,672 -10.2% 24,487 9,597 -60.8%
Bullet 500 2,737 786 -71.3% 286 1,985 594.1% 3,023 2,771 -8.3%
Thunderbird 500 3,373 824 -75.6% - - NA 3,373 824 -75.6%
Himalayan 10,701 15,302 43.0% 7,103 7,664 7.9% 17,804 22,966 29.0%
500-800cc 5,168 20,188 290.6% 4,442 19,597 341.2% 9,610 39,785 314.0%
650 Tw in 5,168 20,188 290.6% 4,420 19,597 343.4% 9,588 39,785 314.9%
Continenta l G T - - NA 22 - -100.0% 22 - -100.0%
T o ta l d o m esti c 8,05,273 6,56,651 -18.5%
T o ta l exp o r ts 20,825 39,188 88.2%
G ra n d to ta l (2-W) 8,26,098 6,95,839 -15.8% 3.8
Do m e s tic Exp o r ts T o tal Do m e s tic
m ark e t s h are (%)
FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%) FY19 FY20 Yo Y (%)
I. M & H C V 43,381 28,884 -33.4% 7,500 3,657 -51.2% 50,881 32,541 -36.0% 12.8
Passenger i.e . Bus 4,151 3,697 -10.9% 569 804 41.3% 4,720 4,501 -4.6% 9.2
G oods i.e . Trucks 39,230 25,187 -35.8% 6,931 2,853 -58.8% 46,161 28,040 -39.3% 13.7
II. L C V 18,351 14,162 -22.8% 2,510 911 -63.7% 20,861 15,073 -27.7% 2.9
Passenger 6,595 5,363 -18.7% 695 271 -61.0% 7,290 5,634 -22.7% 11.8
G oods 11,756 8,799 -25.2% 1,815 640 -64.7% 13,571 9,439 -30.4% 2.0
A . T o ta l VE C V - E i ch er (I + II) 61,732 43,046 -30.3% 10,010 4,568 -54.4% 71,742 47,614 -33.6% 6.0
B . T o ta l VE C V - Vo l vo 1,226 1,107 -9.7% - - NA 1,226 1,107 -9.7% 0.6
T o ta l d o m esti c 62,958 44,153 -29.9%
T o ta l exp o r ts 10,010 4,568 -54.4%
C . G ra n d to ta l (A + B ) 72,968 48,721 -33.2%
Do m e s tic Exp o r ts T o tal Do m e s tic
m ark e t s h are (%)
ICICI Securities | Retail Research 7
ICICI Direct Research
Result Update | Eicher Motors
Exhibit 11: SOTP valuation
Source: Bloomberg, ICICI Direct Research
Exhibit 12: Valuation Summary
Source: Bloomberg, ICICI Direct Research
Exhibit 13: Shareholding pattern
Source: Bloomberg, ICICI Direct Research
F Y22E R em arks
Two -wh eeler b u s in ess -R o yal E n field
E P S (₹) 685
Ta rge t P E multip le (x) 26.0 V a lued R E business a t 26x P /E on F Y22E numbers
P e r sha re va lue (₹) 17,810
Ta rge t marke t cap (₹ crore ) 48,550
C V b u s in ess -V E C V `
P AT 87
Ta rge t P E multip le (x) 15.0 V a lued V E -C V business a t 15x P /E on F Y22E numbers
Ta rge t marke t cap (₹ crore ) 1,309
C ontribution towards E ML 0.54 E ML has 54.4% stake in V E C V
Targe t marke t cap towards E ML (₹ crore ) 712
P e r sha re va lue -V E C V E iche r (₹) 260
Tota l ta rge t marke t cap (₹ crore ) 49,262
P er sh are valu e (₹ ) 18,070
Net S ales G ro wth E P S G ro wth P E E V /E B ITD A R o NW R o C E
(₹ cr) (% ) (₹) (% ) (x) (x) (% ) (% )
F Y18 8,965.0 27.5 719 17.3 23.5 15.0 29.9 39.1
F Y19 9,797.1 9.28 808 12.4 20.9 14.8 24.8 32.5
F Y20P 9,153.6 (6.6) 670 (17.0) 25.1 19.3 18.3 22.5
F Y21E 7,925.3 (13.4) 495 (26.1) 34.0 24.1 12.2 15.9
F Y22E 9,852.8 24.3 691 39.5 24.4 16.9 14.9 19.1
(in %) Mar -19 Ju n -19 Se p -19 De c-19 Mar -20
Promoter 49.3 49.3 49.3 49.3 46.0
FII 32.5 33.2 31.9 31.2 27.7
DII 4.6 4.7 7.2 8.2 11.1
O thers 13.6 12.8 11.6 11.3 15.2
ICICI Securities | Retail Research 8
ICICI Direct Research
Result Update | Eicher Motors
Financial Summary
Exhibit 14: Profit and loss statement | crore
Source: Company, ICICI Direct Research
Exhibit 15: Cash flow statement | crore
Source: Company, ICICI Direct Research
Exhibit 16: Balance Sheet | crore
Source: Company, ICICI Direct Research
Exhibit 17: Key ratios
Source: Company, ICICI Direct Research
(Year-en d March ) F Y19 F Y20P F Y21E F Y22E
To tal o p eratin g In co m e 9,797.1 9,153.6 7,925.3 9,852.8
G rowth (% ) 9.3 -6.6 -13.4 24.3
R aw Mate ria l E xpenses 4,845.7 4,770.9 4,447.4 5,493.3
E mployee E xpenses 702.4 795.8 718.9 756.2
O ther E xpenses 1,134.1 1,181.5 890.6 1,066.6
Tota l O pera ting E xpenditure 6,893.9 6,973.3 6,214.2 7,511.7
E B ITD A 2903.1 2180.3 1711.1 2341.2
G rowth (% ) 3.4 -24.9 -21.5 36.8
D eprecia tion 300.3 381.5 396.3 418.7
Inte rest 7.3 18.9 11.4 12.0
O ther Income 443.4 543.3 502.8 544.1
P B T 3,038.9 2,323.2 1,806.2 2,454.5
O thers 0.0 0.0 0.0 0.0
Tota l Tax 1,077.0 527.4 455.2 618.5
P AT 2202.8 1827.5 1350.6 1883.5
G rowth (% ) 12.4 -17.0 -26.1 39.5
E P S (₹) 808.1 670.4 495.4 690.9
(Year-en d March ) F Y19 F Y20P F Y21E F Y22E
P ro fit after Tax 2,202.8 1,827.5 1,350.6 1,883.5
Add: D eprecia tion 300.3 381.5 396.3 418.7
(Inc)/dec in C urrent Asse ts -286.6 64.7 182.7 -177.3
Inc/(dec) in C L and P rovisions -218.5 -75.7 -264.9 376.0
C F fro m o p eratin g activ ities 1998.0 2198.1 1664.6 2501.0
(Inc)/dec in Investments 838.0 -878.0 -800.0 -1,500.0
(Inc)/dec in F ixed Assets -789.7 -746.9 -500.0 -500.0
O thers -14.8 193.1 -90.8 14.1
C F fro m in vestin g activ ities 33.5 -1431.8 -1390.8 -1985.9
Issue /(B uy back) o f E quity 0.0 0.0 0.0 0.0
Inc/(dec) in loan funds 35.9 -15.5 -50.0 -50.0
D ividend pa id & dividend tax -410.3 -410.3 -272.6 -340.8
O thers 96.1 -355.1 0.0 0.0
C F fro m fin an cin g activ ities -278.2 -780.8 -322.6 -390.8
Net C ash flow 1,753.2 -14.6 -48.8 124.3
O pening C ash 1,212.0 2,965.2 2,950.6 2,901.8
C lo s in g C ash 2965.2 2950.6 2901.8 3026.1
(Year-en d March ) F Y19 F Y20P F Y21E F Y22E
L iab ilities
E quity C apita l 27.3 27.3 27.3 27.3
R eserve and S urplus 8,891.4 9,953.6 11,031.6 12,574.3
To tal S h areh o ld ers fu n d s 8918.7 9980.9 11058.8 12601.5
Tota l D ebt 186.8 171.3 121.3 71.3
D e fe rred Tax L iability 273.9 252.2 218.3 271.4
O the rs 120.8 234.4 224.1 240.2
To tal L iab ilities 9500.1 10638.6 11622.6 13184.4
Assets
G ross B lock 2,785.2 3,669.7 4,231.8 4,731.8
L ess: Acc D eprecia tion 910.6 1,292.2 1,688.4 2,107.2
Net B lo ck 1874.6 2377.5 2543.4 2624.7
C apita l WIP 449.7 312.2 250.0 250.0
Tota l F ixed Asse ts 2,324.4 2,689.7 2,793.4 2,874.7
Investments 4,922.5 5,748.7 6,598.7 8,148.7
Inventory 633.4 572.4 434.3 539.9
D ebtors 90.3 86.8 76.0 94.5
O the rs 252.5 252.4 218.5 271.7
C ash 2965.2 2950.6 2901.8 3026.1
Tota l C urrent Asse ts 3,941.4 3,862.1 3,630.6 3,932.1
C reditors 1,234.1 1,027.7 868.5 1,079.8
P rovisions 33.0 33.9 28.7 35.7
O the rs 619.6 749.4 648.9 806.7
Tota l C urrent L iabilities 1,886.7 1,811.0 1,546.1 1,922.1
Net C u rren t Assets 2054.7 2051.1 2084.5 2010.0
O ther Non current asse t 198.5 149.2 145.9 151.0
Ap p licatio n o f F u n d s 9500.1 10638.6 11622.6 13184.4
(Year-en d March ) F Y19 F Y20P F Y21E F Y22E
P er sh are d ata (₹)
E P S 808.1 670.4 495.4 690.9
C ash E P S 918.2 810.4 640.8 844.5
B V 3,271.7 3,661.4 4,056.8 4,622.7
D P S 125.0 125.0 100.0 125.0
C ash P e r S ha re 1,184.8 1,507.3 1,788.4 2,358.1
O p eratin g R atio s (% )
E B ITD A Margin 29.6 23.8 21.6 23.8
P B T / Net sa les 26.6 19.7 16.6 19.5
P AT Margin 22.6 20.0 17.0 19.1
Inventory days 23.6 22.8 20.0 20.0
D ebtor days 3.4 3.5 3.5 3.5
C reditor days 46.0 41.0 40.0 40.0
R etu rn R atio s (% )
R oE 24.8 18.3 12.2 14.9
R oC E 32.5 22.5 15.9 19.1
R oIC 203.5 91.9 61.4 90.5
V alu atio n R atio s (x)
P /E 20.8 25.1 34.0 24.4
E V / E B ITD A 14.8 19.3 24.1 16.9
E V / Net S a les 4.4 4.6 5.2 4.0
Marke t C ap / S a les 4.7 5.0 5.8 4.7
P rice to B ook V a lue 5.2 4.6 4.2 3.6
S o lven cy R atio s
D ebt/E quity 0.0 0.0 0.0 0.0
C urrent R a tio 0.6 0.7 0.6 0.6
Q uick R a tio 0.2 0.3 0.3 0.3
ICICI Securities | Retail Research 9
ICICI Direct Research
Result Update | Eicher Motors
Exhibit 18: ICICI Direct Research universe (Auto & Auto Ancillary)
Source: Bloomberg, ICICI Direct Research
S ecto r / C o m p an y C MP TP M C ap
(₹) (₹) R atin g (₹ C r) F Y20E F Y21E F Y22E F Y20E F Y21E F Y22E F Y20E F Y21E F Y22E F Y20E F Y21E F Y22E F Y20E F Y21E F Y22E
Apollo Tyre (AP O TYR ) 105 100 Hold 6,006 8.3 2.4 7.6 12.6 44.2 13.8 6.2 5.8 4.5 4.8 3.5 6.1 4.8 1.2 4.3
Ashok L eyland (AS HL E Y) 52 55 B uy 15,221 1.2 1.7 3.2 44.7 30.6 16.2 13.2 11.5 7.8 6.0 7.0 11.9 4.7 5.7 10.4
B a ja j Auto (B AAUTO ) 2,780 2,840 Hold 80,445 176.3 134.9 162.1 15.8 20.6 17.2 12.7 15.8 12.1 23.8 23.2 25.1 25.6 17.7 19.1
B hara t F orge (B HAF O R ) 350 320 Hold 16,295 10.8 7.0 12.7 32.3 49.8 27.6 16.3 18.9 14.0 8.4 6.3 9.4 9.4 5.7 9.8
E ich er Mo to rs (E IC MO T) 16,860 18,070 B u y 45,960 670.4 495.4 690.9 25.1 34.0 24.4 19.3 24.1 16.9 22.5 15.9 19.1 18.3 12.2 14.9
E scorts (E S C O R T) 975 1,020 B uy 11,952 39.6 40.8 50.3 24.6 23.9 19.4 16.3 15.7 12.6 18.9 13.3 14.2 14.2 10.1 11.1
E xide Industries (E X IIND ) 155 170 Hold 13,175 9.7 8.1 9.7 16.0 19.1 16.1 9.5 10.1 8.5 16.7 13.8 15.2 13.4 10.3 11.4
Hero Moto (HE R HO N) 2,400 2,500 Hold 47,928 181.9 109.8 147.6 13.2 21.9 16.3 10.6 14.0 10.2 26.5 18.7 23.2 22.7 14.5 17.9
Maruti S uzuki (MAR UTI) 5,550 4,650 R educe 1,67,654 187.1 138.4 194.4 29.7 40.1 28.5 18.2 21.5 15.3 7.4 4.8 7.9 11.7 8.2 10.6
Minda Industries (MININD ) 287 300 B uy 7,525 7.0 7.6 11.8 40.9 37.6 24.3 13.1 11.7 9.4 11.3 11.8 15.0 11.5 11.6 15.4
Ta ta Motors (TATMO T) 105 85 Hold 38,378 -9.1 -2.4 9.1 NM NM 11.5 4.5 4.4 3.6 4.6 5.7 8.5 0.0 2.6 9.3
R o E (% )E P S (₹) P /E (x) E V /E B ITD A (x) R o C E (% )
ICICI Securities | Retail Research 10
ICICI Direct Research
Result Update | Eicher Motors
RATING RATIONALE
ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%
Pankaj Pandey Head – Research [email protected]
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
ICICI Securities | Retail Research 11
ICICI Direct Research
Result Update | Eicher Motors
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