Eicher Motors surged today ahead of the company's Q4 results.

The scrip of the Delhi-based commercial vehicles maker was up by 2% at Rs 87 on the BSE in early-afternoon trades. Earlier in the session, the scrip hit a high of Rs 87.50.10,100 shares changed hands on the counter.

The Eicher Motors (EML) stock, which had witnessed a sharp fall recently, has staged a smart comeback in the last few sessions on expectations of upbeat Q4 results. The stock witnessed a sharp fall in March 2003. It fell by 15.3% to a low of Rs 69 on 31 March 2003 from Rs 81.50 on 28 February 2003. From that low the stock has staged a recovery to the current level of Rs 87. The recovery on the counter has come amid minor intermittent corrections.

As per a capitalmarket.com poll, EML is expected to post a sharp 89.5% to 125% growth in Q4 net profit to between Rs 10-12 crore as compared to a net profit of Rs 5.33 crore in Q4 ended March 2002. Sales are projected to grow by 7.5%-16.65% to between Rs 171.45 crore and Rs 186 crore.

The strong Q4 results from EML are expected on the back of a volume-led growth in the company's vehicle sales, with the commercial vehicles sector witnessing a revival.

For the month of March 2003, EML reported a 33% rise in vehicle sales to 1,610 units, compared to 1,211 units in March 2002. For the year ended 31 March 2003, EML's sales increased to 12,717 units from 9,630 units sold in 2001-02. The sales comprised 281 HCVs and 1,331 light and medium vehicles (exports).

Analysts are optimistic about the company's foray into the heavy commercial vehicles sector recently, which is expected to drive its growth in the coming year. In February 2003, EML launched its first heavy commercial vehicle `Eicher Jumbo 20.16' in Ahmedabad.

Analysts said the government's thrust on infrastucture through the road projects augurs well for the CV sector.

EML is the second largest player in the commercial vehicles sector. It is reputed for its superior vehicles with higher fuel efficiency and lower maintenance costs.

EML was incorporated in 1982 and the company introduced its first product, the Canter, a 6-tonne GVW truck manufactured at its state-of-the-art plant at Pithampur, Indore, in collaboration with Mitsubishi Motors Corporation, Japan, in 1986. From a single 6-tonne GVW truck in 1986, the company's range today extends to 5-t to 16-t GVW trucks and the Skyline and Voila range of buses. All its products can be offered in BS II compatible options. It also has one of the best compressed natural gas (CNG) technologies in the world for CNG buses.

From a market share of 11.5% in FY 1999-2000, EML's share improved to 17.5% in FY 2001-02. This happened even as industry sales fell by 8.6% during the period. The company's domestic sales increased at a compounded annual growth rate (CAGR) of 13.5% and exports surged at a CAGR of 55%.

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