Vrooming Off

The promoters of Eicher Motors have been selling their shares in the market. Anita Lal, mother of CEO and MD Siddhartha Lal, recently sold 5.4 lakh shares for a consideration of ₹1,031 crore. She currently holds 9.13% stake in the company. All put together, the promoters have sold 11.4 lakh shares worth ₹2,100 crore in recent transactions. Following the sale, the promoters hold 50.67% stake in the company. While the stock is currently trading 18% below its all-time high, the stock has regained some lost ground in recent days, offering an opportunity to sell at a better valuation.

While the the BSE benchmark Sensex has slipped 3% in 2016, the stock of Eicher Motors has gained 8.5% during the same period. The company continues to do well both in terms of growth and profitability in the 2-wheeler segment. Royal Enfield’s domestic sales grew 17.8% QoQ and 61% YoY in March quarter, posting a record high sales of approximately 148,186 bikes. In FY16, bike’s sales were up 53.9% over last year. Eicher Motors’ market share in the motorcycle segment has increased to 4.6% in FY16 from 3.02%. The company also saw a record margin of 29.8% from its Royal Enfield business in the quarter gone by.