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Shares of Eicher Motors, maker of Royal Enfield motorcycles, rose on Royal Enfield’s FY guidance. The stock jumped as much as 3.8 per cent to Rs 29,050, highest since March 14. The stock posted biggest intraday percentage gain since February 1.
For Royal Enfield motorcycles, the company had said on Tuesday 2018-19 capex will be Rs 800 crore ($123.25 million) and production capacity at 950,000 motorcycles.
Royal Enfield plans to to set up wholly owned subsidiaries in Indonesia and Thailand.
Jefferies says production guidance addresses investor concerns over capacity constraints to growth and reiterates its view of a stronger near-term demand outlook for Royal Enfield and the two-wheeler industry.
Citi has raised the target price to Rs 37,200 from Rs 35,600, says capacity expansion augers well for long-term growth. Brokerages Jefferies and Citi have reiterated 'buy' rating on the stock.
Up to Tuesday's close, Eicher Motors stock had declined 7.7 per cent this year after a more than 39 per cent gain last year.
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