HSBC raises target price on Eicher Motors but maintains hold as export outlook remains unclear
By Markets Desk Published on June 20, 2025, 07:32 IST
HSBC has maintained a 'Hold' rating on Eicher Motors, even as it raised the target price to ₹5,600 from ₹5,300, citing sustained growth momentum from Royal Enfield's (RE) premium segment offerings and stable competitive dynamics. However, concerns over the company's export trajectory remain a limiting factor in driving further upside.
According to HSBC, the competitive intensity in the domestic two-wheeler market continues to be benign, particularly in the mid-to-premium motorcycle space where Royal Enfield commands a dominant share. The bank sees structural tailwinds for RE from its successful 350cc platform refreshes, along with strong reception to models like the Hunter, Super Meteor, and Himalayan 450.
On the export front, HSBC acknowledged pockets of stabilisation in Latin America, a key geography for RE's overseas business, but noted that overall visibility on international growth remains unclear. Slowing demand in mature Western markets and currency pressures in Africa and Southeast Asia continue to weigh on near-term expectations.
At its current valuation, the stock is trading at 26x FY27 estimated earnings, which HSBC views as fair, considering the company's robust brand positioning but limited near-term triggers. The brokerage believes that while RE's domestic momentum can continue, upside beyond this level will require a clear revival in exports and operating leverage from new geographies.
Ahmedabad Plane Crash
Markets Desk at BusinessUpturn.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
UPI
31 minutes ago
- UPI
Colombia joins BRICS-backed bank in shift toward new financial order
June 20 (UPI) -- Colombia's recent entry into the BRICS-backed New Development Bank marks a significant shift in its foreign and economic policy. With the move, President Gustavo Petro's administration aims to reduce the country's long-standing reliance on Western financing and attract new investment for strategic infrastructure projects. "Colombia officially joins the BRICS New Development Bank. This membership opens new financing opportunities for strategic projects and is a key step toward diversifying alliances and strengthening the country's economy," the Colombian presidency announced Thursday in a post on X. Colombia's membership involves an initial $512 million commitment and makes it the first South American nation to formally join the bank, which is backed by 11 BRICS full members, including China, Russia, India, South Africa and Brazil. Foreign Minister Laura Sarabia welcomed the announcement, saying the move goes beyond financial strategy and reflects broader national goals. "We continue to pave the way for new opportunities for the country," she wrote on X. Beyond access to loans with fewer conditions, the move carries significant symbolic weight. It reflects the Petro administration's interest in redefining Colombia's international role, shifting away from the traditional Washington-Bogotá axis to pursue a more independent path aligned with the Global South. The announcement has sparked both enthusiasm and skepticism among Colombian analysts, who warn of financial risks, geopolitical consequences and the delicate balance Bogotá must maintain with the United States, its primary trading and military partner. The Petro government has defended the move as a pragmatic step amid global economic volatility and the weakening of the traditional multilateral order. Officials also see it as an opportunity to advance strategic projects such as the interoceanic railway -- an ambitious infrastructure initiative aimed at positioning Colombia as a commercial hub between Asia and the Caribbean. Colombia's Foreign Ministry and Finance Ministry officials emphasized that joining the New Development Bank does not signal a break with the Inter-American Development Bank or the International Monetary Fund. "This is about having more options, not replacing allies," Finance Minister Ricardo Bonilla said. Still, reactions in Colombia remain divided. While lawmakers from the ruling coalition praised what they called the country's "financial emancipation," opposition groups and business associations raised concerns about the fiscal burden and reputational risks of aligning with a bloc that includes China and Russia. "Do we want to depend on the yuan or the ruble? What guarantees does a bank dominated by authoritarian regimes offer?" conservative senator and former presidential candidate Enrique Gómez asked. Colombia has long been one of the United States' closest allies in the fight against drug trafficking and in supporting the liberal economic model promoted by Washington. Against that backdrop, closer ties with China have raised tensions. The U.S. State Department has said it will firmly oppose financing for Latin American projects tied to China's Belt and Road Initiative, a global investment strategy backed by Beijing that aims to expand its economic influence through critical infrastructure development around the world. Founded in 2015, the New Development Bank aims to provide financing for infrastructure and sustainable development in emerging economies, with fewer political conditions than the International Monetary Fund or the World Bank. To date, it has approved more than $40 billion in funding for 122 infrastructure projects in sectors such as transportation, clean energy and sanitation.
Axios
37 minutes ago
- Axios
Congress could sell off 14 million acres of public land in Colorado
More than 14 million acres of federal public land in Colorado could be eligible for sale if Congress passes the Trump administration's budget bill, per a new analysis by a conservation nonprofit. Why it matters: This includes some of the state's most popular hiking, skiing and camping areas across the Western Slope. The big picture: The Republican-led proposal would require the U.S. Forest Service and Bureau of Land Management to put up to 3.3 million acres on the market for housing development. The bill's focus is on parcels outside of protected lands (like national parks, monuments or wilderness areas, which are exempt) but near roads and other development deemed suitable by local and state lawmakers. The Wilderness Society estimates more than 250 million acres across 11 Western states could be eligible for sale. Zoom in: In Colorado, that means some of its most prized public lands could be up for grabs, including sweeping sections of the Arapaho, San Juan and Rio Grande national forests. Also on the line are iconic stretches of the Million Dollar Highway and beloved hiking spots near Kenosha and Guanella passes, especially popular during fall leaf-peeping season. Follow the money: Most of the revenue — projected between $5 billion and $10 billion over the next decade — would go to the U.S. Treasury. Just 5% would trickle down to local governments. It's unclear how much the sale of public lands would negatively impact the outdoor recreation economy, which generated $1.2 trillion in economic output and supported 5 million jobs nationwide in 2023. Reality check: A recent Headwaters Economics report found less than 2% of public lands in the West near housing-hungry towns are actually suitable for development, and could be complicated due to high wildfire risk. The fine print: For the first decade, the land could only be sold for housing or related infrastructure — but after 10 years, that restriction vanishes, opening the door to virtually any kind of development, from strip malls to oil rigs. What they're saying: Colorado Democratic U.S. Sen. John Hickenlooper, who sits on the Senate Energy and Natural Resources committee, told CPR no Democrats on the committee were given advance notice or could offer input, despite their states being on the list.
Yahoo
an hour ago
- Yahoo
Trump Pledge of Quick China Magnet Flows Has Yet to Materialize
(Bloomberg) -- Almost 10 days since President Donald Trump declared a 'done' trade deal with Beijing, US companies remain largely in the dark on when they'll receive crucial magnets from China — and whether Washington, in turn, will allow a host of other exports to resume. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown While there has been a trickle of required permits, many American firms that need Chinese minerals are still waiting on Beijing's approval for shipments, according to people familiar with the process. China's system is improving but remains cumbersome, they said, contrary to Trump's assurances rare earths would flow 'up front' after a June 11 accord struck in London. The delays are holding an array of American industries hostage to the rocky US-China relationship, as some firms wait for magnets and others face restrictions selling to China. That friction risks derailing a fragile tariff truce clinched by Washington and Beijing in Geneva last month, and triggering fresh rounds of retaliation. Interviews with multiple Western buyers, industry insiders and officials familiar with discussions revealed frustration over vague policies in both countries and lingering confusion about what level of magnet approvals from China would trigger Trump to abandon his tit-for-tat export curbs. 'Even if export approvals accelerate, there are so many unknowns about the licensing regime that it's impossible for companies to have a strong sense of certainty about future supply,' said Christopher Beddor, deputy China research director at Gavekal Research. 'At a minimum, they need to factor in a real possibility that talks could break down again, and exports will be halted.' In response to China's sluggishness on magnets, Trump last month restricted US firms from exporting chip software, jet engines and a key ingredient to make plastic to China until President Xi Jinping restores rare-earth exports. Companies subject to Washington's curbs have halted billions of dollars in planned shipments as they wait for players in unrelated sectors to secure permits from Beijing, which could take weeks or even months to process, given the current pace. Corporate chiefs affected by the export-control spat have sought clarity from the administration on its strategy, according to people familiar with the matter. The Commerce Department — which administers the rules — has offered few details, they added. Oil industry executives have tried to convince Trump officials that blocking exports of ethane — a gas used to make plastics — is contrary to US national security interests, according to people familiar with the deliberations. Business leaders have asked for export restrictions to be removed but that's been unsuccessful so far, the people said. Energy and chemical giant INEOS Group Holdings SA has one tanker full of ethane waiting to go, while Enterprise Products Partners has three to four cargo ships stuck in limbo, according to a person familiar with the matter. That's particularly galling because China has adequate ethane supplies in reserve and can switch to using naphtha from the Middle East and other regions for much of their production, the people said. Representatives from the companies did not respond to requests for comment. Industry figures have consistently told the Trump administration the ethane export restrictions are inflicting more pain on US interests than on China, according to the people. China's Ministry of Commerce, which administers export licenses, hasn't responded to Bloomberg's questions on how many for rare earths have been granted since the London talks. At a regular briefing in Beijing on Thursday, spokesperson He Yadong said Beijing was 'accelerating' its process and had given the go-ahead to a 'certain number of compliant applications.' Access to rare earths is an issue 'that is going to continue to metastasize until there is resolution,' said Adam Johnson, chief executive officer of Principal Mineral, which invests in US mineral supply chains for industrial defense. 'This is just a spigot that can be turned on and off by China.' China only agreed to grant licenses — if at all — for six months, before companies need to reapply for approvals. Firms doing business in the US and China could see recurring interruptions, unless the Commerce Ministry significantly increases its pace of process applications. Adding an extra layer of jeopardy for US companies, Chinese suppliers to America's military-industrial base are unlikely to get any magnet permits. After Trump imposed sky-high tariffs in April, Beijing put samarium — a metal essential for weapons such as guided missiles, smart bombs and fighter jets — on a dual-use list that specifically prohibits its shipment for military use. Denying such permits could cause ties to further spiral if Trump believes those actions violate the agreement, the terms of which were never publicized in writing by either side. That sticking point went unresolved during roughly 20 hours of negotiations last week in the UK capital, people familiar with the details said. Complicating the issue, companies often buy magnets from third-party suppliers, which serve both defense and auto firms, according to a person familiar with the matter. That creates a high burden to prove to Chinese authorities a shipment's final destination is a motor not a missile, the person added. Beijing still hasn't officially spelled out the deal's requirements, nor has Xi publicly signaled his endorsement of it — a step Trump said was necessary. 'The Geneva and London talks made solid progress towards negotiating an eventual comprehensive trade deal with China,' White House spokesman Kush Desai said. 'The administration continues to monitor China's compliance with the agreement reached at Geneva.' China's Commerce Ministry is working to facilitate more approvals even as it asks for reams of information on how the materials will be used, according to people familiar with the process. In some cases, companies have been asked to supply data including detailed product designs, one of the people said. Morris Hammer, who leads the US rare-earth magnet business for South Korean steelmaker Posco Holdings Inc., said Chinese officials have expedited shipments for some major US and European automakers since Trump announced the agreement. China's Advanced Technology & Materials said Wednesday it had obtained permits for some magnet orders, without specifying for which destinations. The company's customers include European aerospace giant Airbus SE, according to data compiled by Bloomberg. Around half of US suppliers to Toyota Motor Corp., for example, have had export licenses granted, the company said – but they're still waiting for those materials to actually be delivered. It's likely some of the delays are transport-related, one of the people said. Even with permits coming online, rare-earth materials are still scarce because overseas shipments were halted for two months starting in April, depleting inventories. Trump's agreement 'will allow for rare earths to flow out of the country for a short period of time, but it's not helping the auto industry because they're still talking shutdowns,' Hammer said. 'Nobody trusts that this thaw is going to last.' For many automakers, the situation remains unpredictable – forcing some to hunt for alternatives to Chinese supplies. Two days after Trump touted a finalized trade accord in London, Ford Motor Co. Chief Executive Officer Jim Farley described a 'day-to-day' dynamic around rare-earths licenses – which have already forced the company to temporarily shutter one plant. General Motors Co. has emphasized it's on firmer footing in the longer term, because it invested in domestic magnet making back in 2021. The automaker has an exclusive deal to get the products from MP Materials Corp. in Texas, with production starting later in the year. It has another deal with eVAC of Germany to get magnets from a South Carolina plant starting in 2026. In the meantime, GM and its suppliers have applied for permits to get magnets from China, a person familiar with the matter said. Scott Keogh, the CEO of Scout Motors — the upstart EV brand of Volkswagen AG — told Bloomberg Television his company is re—engineering brakes and drive units to reduce the need for rare earths. Scout is building a plant in South Carolina to make fully electric and hybrid SUVs as well as trucks starting in 2027. Until the rare-earth supply line is re-opened to Washington's satisfaction, Trump has indicated that the US is likely to keep in place its own export restrictions. Senior US officials have suggested the curbs are about building and using leverage, rather than their official justification: national security. Commerce Secretary Howard Lutnick said the measures were used to 'annoy' China into complying with a deal US negotiators thought they'd already reached. Restrictions on sales to China of electronic design automation software for chipmaking are emblematic of the standoff. Those EDA tools are used to design everything, from the highest-end processors for the likes of Nvidia Corp. and Apple Inc. to simple parts, such as power-regulation components. Fully limiting China's access to the best software, made by a trio of Western firms, has been a longtime priority in some Washington national security circles — and would build on years of US measures targeting China's semiconductor prowess. While some senior Trump officials specifically indicated the administration would relax some semiconductor-related curbs if Beijing relents on rare earths, EDA companies still lack details on when, and whether, their China access will be restored, said industry officials who requested anonymity to speak candidly. Even if that happens, there's worry that heightened geopolitical risks will push Chinese customers to hunt for other suppliers or further develop domestic capabilities. 'The risk is there for the London deal to fall apart,' said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. 'Because rare earths is a very granular issue and mistakes can be made.' --With assistance from Jennifer A. Dlouhy, David Welch, Lucille Liu, James Mayger, Jing Li, Joe Ryan and Nicholas Lua. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
