Royal Enfield parent surges to record high on strong India growth prospects

Feb 11 (Reuters) – Shares of Eicher Motors rose nearly 7% to a record high on Wednesday as the Indian automaker’s plans to boost capacity raised prospects of continued growth in its mainstay Royal Enfield motorcycles business.

The Himalayan 450 motorcycle maker’s shares were last up 6.3% at 7,756 rupees and looked set for their best single-day percentage gain since January 2025.

On Tuesday, Eicher Motors approved an investment of 9.58 billion rupees ($105.8 million) to raise capacity at a plant in the southern state of Tamil Nadu, which would lift overall capacity to 2 million from 1.46 million units currently.

Analysts at UBS said the capacity boost “reinforces” its thesis that India’s tax cuts on most motorcycles would drive premiumisation, with Royal Enfield “emerging as a key beneficiary.”

Jefferies echoed that sentiment, while noting that Royal Enfield’s “toughest phase of competition as well as margin concerns are behind.”

At least 12 brokerages raised their target price on Eicher after the results, lifting the median to 7,500 rupees from 7,190 rupees earlier, per data complied by LSEG.

The company reported a bigger-than-expected quarterly profit on Tuesday, helped by strong domestic sales of Royal Enfield motorcycles on the back of tax cuts.