It is a season of guidance cuts for auto makers as poor demand and higher ownership costs have hit sales this quarter. After Escorts and Mahindra and Mahindra (M&M), Eicher Motors is next in line to trim its FY19 production target.
Sharing his outlook on Eicher Motors, Jay Kale, VP-research at Elara Capital, said that he expects actual sales for the company to be lower than the production guidance.
“Therefore, we have a 'sell' rating on the stock and we believe that there could be further downside risks from these levels,” he said.
On the volume front, Kale said, “For the next 2 months odd they could still do around 70,000-72,000 per month but going forward you will not see double-digit growth in FY20 in our view, the industry is kind of slowing down and Eicher’s outperformance over the motorcycle industry has narrowed substantially.”