Royal Enfield Himalayan: What Nomura says on pricing, Eicher Motors shares

Eicher Motors Ltd 's arm Royal Enfield (RE) has launched its new adventure tourer, the Himalayan, with a 452 cc Liquid Cooled engine. If one goes by Nomura India, the new Himalayan is a significant upgrade, with attractive design, improved performance and tech features over Himalayan 411. The foreign brokerage sees the Himalayan to attract sales of 3,000 units per month now, which it believes may improve to about 4,000 units a month soon.

The New Himalayan has been launched at an introductory price of Rs 2,69,000 ex-showroom, which is valid till December 31, 2023. "The reviews of the bike are strong as well. At the same time, with 25 per cent higher pricing than the old Himalayan, the focus seems to be to retain exclusivity rather than sell in large numbers," Nomura India said.

The brokerage said the Himalayan price is at an 35 per cent premium to RE 350cc bikes, about 15 per cent premium to Bajaj Auto's Speed 400 and similar to the top variant of H-D X440. Besides, it noted that the price will likely increase further in January 2024.

"Thus, the segment size will remain limited, in our view, as was the case with the company’s 650cc Twins – which had also received strong reviews when launched. We estimate sales of the Himalayan to improve from 3,000 units/month currently to nearly 4,000 units/month in steady state," it said.

Nomura expects volumes for Royal Enfield at 9,22,000 units in FY24 (up 10 per cent), 9,80,000 units in FY25 (up 6 per cent) and 1,034,000 units in FY26 (up 6 per cent).

"We maintain our Neutral rating on the Eicher Motors stock, as we believe that the >250cc motorcycle market has space for 2-3 players where RE occupies 90 per cent share. We expect a further drop in market share as competition ramps up," Nomura said.

The brokerage suggested a share price target of Rs 3,640 on the stock. The scrip closed at Rs 3,846 on Friday, down 0.97 per cent.

The Himalayan was launched on November 24 RE’s motorcycling festival MOTOVERSE 2023. The Himalayan is available in three variants: Base, Pass and Summit, and has five colour options. The new offering by Royal Enfield comes with a new 452 cc Liquid Cooled engine and has a six-speed gearbox and slipper clutch. It is also equipped with a 4-Inch TFT instrument cluster with Google Maps.

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