Buy Eicher Motors with a target of 18000, cmp 14500

Buy Eicher Motors with a target of 18000, cmp 14500

• Royal Enfield sales went up by 52% YOY & we are expecting that sales will go up by 47% in 2015.

• Sales of Eicher Motors are expected to grow to 8700 cr in 2014, 12500 cr in 2015 & 17200cr in 2016.

• PAT is expected to grow to 1700cr in 2016

• EPS is expected to grow to 405 in 2015 to 639 in 2017

• EPS growth is expected to grow to 57% which means that we can value the company at 57PE

• At future EPS of 639 and PE of 57, we can value the share upto 36000 and if we keep a margin of safety of 50%, still the share is expected to grow to 18000.