Eicher Motors shares surged over 5% in early trade on Monday after the company reported a steady Q4FY26 performance that largely met or slightly exceeded analysts’ estimates, while management commentary around demand, pricing power and capacity expansion boosted investor confidence.
The stock climbed as much as 5.11% to ₹7,338 after the company reported consolidated revenue of ₹6,080 crore for the March quarter, up 16% year-on-year. Net profit rose 11.6% YoY to ₹1,520 crore, while EBITDA increased 20.4% to ₹1,514 crore.
The company’s EBITDA margin came in at 24.9%, slightly above analysts’ estimates of 25% despite persistent commodity inflation pressures during the quarter.
A key positive for the market was Royal Enfield’s ability to maintain healthy profitability despite facing nearly 90 basis points of commodity inflation during the quarter.
Brokerage firm CLSA said Royal Enfield partially offset the impact through calibrated price hikes implemented in January and April, along with cost optimisation and operating leverage benefits. The brokerage maintained an “Outperform” rating on the stock with a target price of ₹7,651.
CLSA also highlighted that Royal Enfield is nearing 90% utilisation levels and is now moving ahead with both brownfield and greenfield capacity expansion plans to support future demand growth.
The brokerage expects Royal Enfield to outperform industry growth and has built in a 12% volume CAGR between FY26 and FY28, driven by continued strength in the premium 350cc-plus motorcycle segment.
Goldman Sachs also retained its “Buy” rating with a target price of ₹8,400, stating that revenue and EBITDA came in slightly ahead of its estimates.
The brokerage noted that gross margins remained stable sequentially despite raw material inflation, helped by price hikes, favourable product mix and value engineering initiatives.
Another major positive for investors was management commentary indicating that demand momentum remains healthy. The company said customer inquiries in May were still running over 23% higher year-on-year.
Management also clarified that temporary production disruptions caused by labour and raw material shortages in May have now been resolved. Dealer inventory levels remain lean at just 7–8 days, indicating healthy retail demand and controlled channel inventory.
Analysts also believe recent price hikes implemented in April could help offset a significant portion of future commodity cost pressures going into FY27.
While brokerages remained constructive on Royal Enfield’s growth outlook, CLSA turned cautiously optimistic on VECV due to macroeconomic uncertainties and geopolitical risks linked to the ongoing Middle East crisis.