Eicher Motors Ltd

CMP: 1450

Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also exported to other countries. Eicher Motors also manufactures tractors, two-wheelers and automotive gears.

Eicher Motors is a decent bet in mid-cap space. Its popularly known for its branded two wheeler Royal Enfield and has a 50:50 joint venture with Volvo Group. Its currently trading at a P/E of 40 for its unique presence. Decent dividend yields of less than 1% in the last 12 months. Minimal liability and strong cash flows makes it safer. Revenues have dipped from over 2000 Crores to less than 500 Crores in the last 5 years. Profits have marginally risen from 60 Crores to 75 Crores on increasing NPM compensating for the revenue dip. NPM has risen from 3% to 17% over the last 5 years. Buy and hold for long term gains.