Business

Multibagger blue-chip stock turns ₹1 lakh into ₹30 Cr in 23 years: Buy?

With market value 1.02,575.98 Cr, Eicher Motors Ltd. is a blue-chip company that operates in the consumer discretionary goods and services (CDGS) industry. As the flagship of the Eicher Group, Eicher, the parent company of Royal Enfield, is a major player in the Indian automotive sector. Eicher and AB Volvo of Sweden have a strategic partnership with the Volvo Eicher Commercial Vehicle Limited (VECV) brand. Eicher Motors is listed on the BSE and NSE, and the stock is compared with the Nifty 50 Index as of April 1, 2016. In a 23-year long-term investment, Eicher Motors Ltd. is one of those multibagger stocks that has transformed investors. from lakhpati to crorepati.

Eicher Motors stock price history

Shares of Eicher Motors Ltd closed today at Level 3,750.05 per person, up 1.85% from the previous closing level of 3,682.05. Compared to the 20-day average volume of 928,626 shares, the stock has a total volume of 659,825 shares today. Are from 1.22 on January 1, 1999, at current market prices, the stock price has gone up a lot, recording multibagger gains and an all-time high of 307,281.15%. Therefore, the return on investment will be worth 30.73 Cr. now if an individual has invested 1 thousand in stock 23 years ago.

The stock has increased in price by 20.14% over the past five years and 31.26% in the past year. As of now, the stock is up 37.93% year-to-date in 2022. On the NSE, the stock hit a 52-week high of 3,787.25 on (September 21, 2022) and the 52-week low is 2,159.55 on (March 8, 2022), indicating that after hitting a new high yesterday, the stock was trading 0.98% below its high and 73.64% above its low. closing price today. At today’s closing price, the stock is trading on 5 days, 10 days, 20 days, 50 days, 100 days and 200 days Exponential Moving Averages (EMAs) and Simple Moving Averages (SMAs) ).

The RSI indicator value of Eicher Motors Limited as of September 22, 2022 is 71.6, which indicates that the script is in the overbought zone. During the quarter ended June 2022, the company recorded an incentive share ownership ratio of 49.21%, FII held 29.50% (up 0.28% QoQ), DIIs held 10, 13% (up 0.18% QoQ), 0.10% Government shares and public shares. was 11.06% (down 0.46% QoQ).

Should you buy Eicher Motors stock?

Research analysts Aditya Welekar and Shridhar Kallani of brokerage Axis Securities said today in their research report that “Royal Enfield (RE) domestic sales achieved a CAGR of 13% over the period. 19-22 financial years due to many fluctuations. Covid-led lockdowns and higher car prices due to commodity inflation, weak consumer sentiment and supply chain constraints have led to lower sales. However, supply and demand constraints are now being eased, and the drop in commodity prices coupled with vehicle prices expected to remain steady should boost sales going forward. To gauge market sentiment, we interacted with over 22 dealers across India. Testing our channel showed 20% higher queries and footfalls on September 22nd and strong customer feedback to the newly launched Hunter 350. “

They added that “RE wholesale sales reached 70,112 in August 22, up 53% YoY and 26% month-on-month, indicating that production restrictions have been eased. If current consumption is maintained, RE will move into an output growth phase. In this context, the wholesale numbers of September 22 will be the key monitorable to determine whether the production problems have ended. With strong demand, expanding product portfolio, expanding supply chain, expanding distribution network and fast-growing international sales, we model volume growth of 19% CAGR FY22 -25E. Growth in volume will drive higher operating leverage, which, together with a correction in commodity prices, will lead to an expansion of EBITDA margins (+510 percentage points in FY 22-25. ). “

“We raise our valuation from March 24 to September 24 and upgrade our rating on the stock from HOLD to BUY with a revised TP of 4.125 ( 3.120 earlier). We value independent business RE at 27x (vs 24x previously) on September 24 EPS ( 3,675) and VECV at 12x EV/EBITDA (compared to previous 11) September 24th EBITDA ( 448), implying an 11% increase over CMP”, they also stated.

Disclaimer: The views and recommendations expressed above are those of individual analysts or brokerage firms, not those of Mint.

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