InvestorQ : Can you tell me why the stock of Eicher Motors has gone up so rapidly in the last few weeks?
Lavanya Subramanian made post

Can you tell me why the stock of Eicher Motors has gone up so rapidly in the last few weeks?

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diksha shah answered.
1 month ago
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If there is one stock that has best reflected the sharp turnaround in the auto sector, it is Eicher Motors. The stock scaled a new high of Rs3,479 on Tuesday and has gained more than 50% in this year itself. Incidentally, the stock also regained the Rs1 trillion market cap after a long break. Post the strong earnings announcement, the stock has rallied 12% in the last month itself. But the trigger on Tuesday came from the auto components association announcing record sales turnover for auto components in FY22 at Rs4.21 trillion.

But that was more a short term trigger. Investors are betting on government spending in infrastructure and pent-up fleet replacement as the key triggers as rural consumption and semi-urban consumption starts to look up amidst low inflation expectations. It has put limits on the incremental capital needed to be employed in new launches. The company, which makes Enfield Motor Cycles, has rallied in tandem with the pick-up in auto stocks. The sharp improvement in the microchip situation has also ensured normalized production schedules.

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