Eicher Motors shares hit hard, Hero MotoCorp up as Harley-Davidson X440A bookings begin. Analyst views

Shares of Royal Enfield-owner Eicher Motors plunged 6 per cent on Tuesday as Hero MotoCorp announced opening of bookings for its first co-developed premium motorcycle with the American motorcycle-maker, Harley-Davidson from 4:40 pm onwards.

HD X440 would rival the likes of Royal Enfield's RE Classic 350 (sales of 26,200 units per month) and Hunter 350 (sales of 15,900 units per month). While the HD X440 costs 13 per cent more than the RE Classic 350, it also boasts a larger 440CC engine, analysts noted.

"We have been of the view that the >250cc market may have space for 2-3 players, as consumers will want choices, and currently Royal Enfield occupies 90 per cent market share in the segment. Also, the high gross margins of RE at 43 per cent (Rs 75,000 per bike) make the segment attractive for new players. We await the India launch of Bajaj-Triumph bikes on 5

July, but the pricing of Harley may make Triumph (unlisted) also consider aggressive pricing. We expect Harley and Triumph to also compete with RE in export markets in the next two years," said Nomura India.

Motilal Oswal said HD X440’s starting price of Rs 2,29,000 is very aggressive and it looks like a credible product from Harley brand. "While we await real world feedback for the product, it ticks all the right boxes on paper to make it successful. This platform will also have a different product under Hero brand later during the year," it noted.

For now, the average industry size of domestic >350CC category was 65,500 units per month as of FY23. This implied 5 per cent share of the overall domestic two-wheeler industry. Within this, RE commanded 93 per cent share, followed by HMSI (4 per cent) and Bajaj Auto (2 per cent).

Harley Davidson X440  is Hero MotoCorp's first co-developed product with Harley Davidson (HD) – ‘X440’ – at CIT Jaipur and also marks HMCL’s entry into >400cc category where it had no presence earlier.

Nomura India expected initial sales could of 3,000-4,000 units per month but will have potential to ramp up to 5,000-10,000 units per month over the next year. The market may focus more on initial booking numbers though, Nomura India said.

Shares of Eicher Motors settled the day at Rs 3,402, down 6.26 per cent. Hero MotoCorp closed the day at Rs 3,028.55, up 4.45 per cent.

 

Also read: Genus Power shares soar 15% to hit 52-week high today; here's why

Also read: IDFC First Bank, Paytm, PB Fintech: These mid-caps surged over 75% from 52-week lows. Do you own any of these?