Mumbai: Shares of Eicher Motors Ltd fell over 7% today after the company said total sales of its Royal Enfield two-wheeler division declined 13% to 58,278 units in December, compared to 66,968 units in the same period last year. Eicher Motors shares slumped as much as 9.67% intraday to ₹ 20,950.25 per share on the NSE. The stock closed at 21,014, down 9.40% from its previous close, while the Nifty 50 Index ended 1.08%, or 117.60 points down at 10,792.50.
“This weakness in demand might continue in near future, considering the substantial increase in cost of ownership (insurance, rear disc brake and ABS related) and Jawa has emerged as a reasonable alternative for potential RE customers," said Motilal Oswal in a research note. The brokerage lowered volume estimates for RE for FY19/20 to 846k/919k. It maintained a “buy" rating on the stock, with the TP of ₹ 24,760 per share.
Meanwhile, the company said total December sales of Eicher-branded trucks and buses rose 2.6% to 6,113 units, compared to 5,955 units in the year-ago month. Domestic sales rose 1.3% to 5,112 units in December 2018, versus 5,045 units the same month a year ago. Exports of the Eicher-brand of commercial vehicles increased 10% to 1,001 units in December from 910 units in a year ago.
VE Commercial Vehicles Ltd, a Volvo Group and Eicher Motors joint venture, reported a 2.4% increase in total December sales to 6,236 units, compared to 6,087 units in December 2017. Total sales of Volvo trucks declined to 123 units last month as compared to 132 units in the year-ago.
Shares of other two-wheeler makers also declined, with Bajaj Auto down 0.4%, TVS Motor falling 0.6% and Hero MotoCorp nearly 2%. The Nifty Auto Index was down nearly 2%.