Eicher Motors entering a challenging terrain; stock falls nearly 8%

Delay in discretionary spends, competitive intensity in export markets among challenges

The gains last week from the resumption of manufacturing operations and a partial reopening of the dealer network for the auto sector and Eicher Motors were short-lived. While the auto sector shed 5.5 per cent, Eicher fell by nearly 8 per cent on Monday. Though the company is expected to hold on to its market share in the premium segment and launch of cheaper variants are positive, near-term headwinds are hurting sentiment.

Even as Royal Enfield’s volumes declined 16 per cent in FY20, it outperformed the sector that fell 18 per cent. The company gained 145 basis points market share