Why did Eicher Motors share tumble nearly 7% today?

Shares of Eicher Motors Ltd, the parent of Royal Enfield, tumbled as much as 6.61 per cent to hit a low of Rs 6,947.95 in Tuesday's trade. The stock later pared some of its losses and was last seen trading 4.15 per cent lower at Rs 7,131.10.

Some market experts largely attributed the decline to the proposed Delhi EV Policy and profit booking.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "Eicher Motors shares came under pressure after investors reacted to Delhi's proposed EV Policy 2.0. The draft policy suggests stopping the registration of new petrol and CNG two-wheelers in the capital from 2028, which has raised concerns about the long-term demand outlook for Royal Enfield motorcycles."

He added, "Although the proposal is yet to be implemented, the news triggered cautious sentiment and profit booking in the stock. Investors are now watching how the company adapts to the evolving electric vehicle landscape. While the near-term reaction has been negative, Eicher's strong brand and expansion plans continue to support its long-term growth story."

The Delhi Cabinet has approved the EV Policy 2026-2030 with a budgetary outlay of Rs 15,000 crore. The policy is set to come into effect from July 1 and will remain in force until March 31, 2030. It aims to accelerate the adoption of electric mobility through a phased transition.

Under the policy, only electric auto-rickshaws will be registered in Delhi from January 2027, while registrations of new petrol- and CNG-powered two-wheelers will stop from April 2028. It also offers incentives for electric vehicles and focuses on expanding the city's EV charging infrastructure.

Meanwhile, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted, "The stock is witnessing some profit booking at current levels. The slow progress of the monsoon could dampen rural demand over the short to medium term. Long-term investors can continue to hold the stock, while fresh entrants should adopt a 'buy-on-dips' strategy."