EICHER MOTORS LTD - Quantamental Equity Research

Quantamental Equity Research on EICHER MOTORS LTD | Release: 12 Feb 2019 12:23:21 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:EICHERMOT and BSE CODE:505200
Last Close:  INR 20753.15
Fair Value:  INR 11290.35
Est. Price by Mar 19:  INR 22611.9
Market Capitalization (INR Crs):  56603.70
Industry:  2/3 Wheelers
Rating:  NEUTRAL
Upside:  9%
Company Profile
Eicher Motors (EML) is the flagship company of the Eicher Group, engaged in manufacturing automobile products and related components.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 27% 47% 112%  
EBIT % 28% 211% 417%  
Earnings % 18% 218% 504%  
Book Value %  32% 179% 301%  
Stock Total Return %  18% 99% 1001%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 49.33  
(B) FII/FPI 30.79  
(C) DII/Insurance Companies 6.18  
(D) Public holding < 2 lakhs of cap. 7.99  
(E) Others 5.71  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 621 1150 1556 2765 4956 15307 19704 25803 30445 22612 25392 27914 30227 31997  
Return on Equity 8% 15% 21% 18% 19% 24% 37% 31% 28% 24% 22% 20% 18% 17%  
Price to Earning  9.4 16.4 13.6 23.0 34.0 67.4 40.0 42.1 42.3 29.9 29.9 29.9 29.9 29.9  
EVTI 0.2 0.6 0.6 1.0 1.8 4.6 7.7 8.8 8.2 5.1 5.0 4.9 4.9 4.8  
EVTIFM 9.4 16.4 13.6 23.0 34.0 67.4 40.0 42.1 42.3 29.9 29.9 29.9 29.9 29.9  
Price to Book Value 0.7 2.5 2.8 4.3 6.5 16.5 14.6 13.1 11.8 7.0 6.5 5.9 5.4 5.0  
Debt to Equity  0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 1% 1% 1% 1% 1% 0% 1% 0% 0% 1% 1% 1% 1% 1%  
Cash Flow to Firm 83% 10% 7% 4% 3% 2% 6% 3% 2% 5% 5% 6% 6% 6%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales       8,964.96     10,162.75     11,308.16     12,346.29     13,221.67     13,882.76  
EBITDA       3,344.29       3,738.82       4,160.21       4,542.14       4,864.18       5,107.39  
EBIT       3,120.99       3,485.69       3,908.18       4,296.47       4,652.40       4,924.83  
PBT       3,115.65       3,480.35       3,908.18       4,296.47       4,652.40       4,924.83  
NPAT       1,959.67       2,065.45       2,319.35       2,549.78       2,761.02       2,922.69  
Price to Earning             42.34            29.86            29.86            29.86            29.86            29.86  
Price to Book Value            11.80              7.04              6.47              5.93              5.44              4.96  
Debt to Equity               0.02                 -                   -                   -                   -                   -    
Return on Equity              0.28              0.24              0.22              0.20              0.18              0.17  
Enterprise Value to Total Income (EVTI)              8.16              5.06              5.01              4.93              4.87              4.78  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            54.34            37.05            36.42            35.60            34.79            33.91  
Price or Est. Share Prices     30,444.90     22,611.90     25,391.55     27,914.30     30,226.85     31,996.85  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       3,480.35       3,908.18       4,296.47       4,652.40       4,924.83  
Interest              5.34                 -                   -                   -                   -    
Depreciation          253.13          252.03          245.67          211.78          182.56  
Cash Flow Before Tax       3,738.82       4,160.21       4,542.14       4,864.18       5,107.39  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax       2,468.00       2,746.16       2,998.26       3,210.85       3,371.39  
Terminal Cash Flow                                                                                    -       41,197.45  
Total Cash Flow       2,468.00       2,746.16       2,998.26       3,210.85     44,568.84  
Present Value of Cash Flow     30,794.02  
Debt                 -    
Value of Equity     30,794.02  
Fair Value Per Share     11,290.35  
Equity          56,604
Debt               151
Beta Take from Reuters 0.98
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   5
Tax Benefit                   2
Interest Net of Tax                   4
Debt               151
Cost of Debt 2%
Cost of Equity 15%
Debt Weight 0%
Equity Weight 100%
WACC 14%
Cash Flow of Mar-23 E       3,371.39
Growth 6.2%
Present Value of Terminal Cashflow     41,197.45
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Maruti Suzuki        7,177.90        216,830       1,382.33            17.39            23.98              2.21            73.90              5.19            28.58                 -                1.11            11.95          242.37          82,342            56.21               379          -12.33              2.00          -33.53          -17.22       2,794.94
   2  Bajaj Auto        2,853.60          82,574          704.48            29.99            30.96              1.97            23.02              4.05            17.59              0.01              2.10            17.65        -151.45          31,996            49.30               131            -7.52            16.00            -2.85            20.49       1,603.43
   3  M & M           647.55          80,503          295.81                 -              13.64                 -                   -                2.19            14.05              1.52              1.16                 -                   -                   -              19.87                 -                   -                   -                   -                   -            634.09
   4  Hero Motocorp        2,889.05          57,702          635.14            31.66            46.10              1.55            20.96              4.55            15.93                 -                3.29            15.42            93.93          32,210            34.63                 99          -13.49              7.53          -21.22            -4.51       1,609.89
   5  Eicher Motors      20,753.15          56,604       2,867.26            37.61            49.40              4.94            33.44              7.24            26.71              0.02              0.53            31.85        -426.96          10,119            49.35               164            -2.79              3.18            -2.88              2.39       7,081.86
   6  Tata Motors           152.65          48,215          301.06          -80.95              8.55              0.41            16.89              0.51            46.13              0.93                 -            -80.95          -55.76        198,275            40.11               110              6.78              4.95       2,473.66          -40.87                 -  

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