Eicher Motors Q1 Results: Sales Slump Pushes Royal Enfield Maker Into Rs 55-Crore Loss
Eicher Motors Ltd. has reported a quarterly loss as the coronavirus pandemic disrupted everything from production to sales of automobiles, dealing a fresh blow to the already struggling sector.
The maker of Royal Enfield motorcycles reported a net loss of Rs 55 crore in the quarter ended June compared to a profit of Rs 452 crore in the same quarter last year, according to an exchange filing. Analysts’ estimates compiled by Bloomberg had pegged a profit of Rs 20 crore.
- Revenue fell 66% to Rs 818 crore, compared with the Rs 791-crore forecast.
- Operating profit fell 99% to Rs 3.8 crore.
- Ebitda margin contracted to 0.5% from 25.8%
India’s auto sector was grappling with a prolonged slowdown when the coronavirus lockdown stalled operations. After a washout in April, sales revived marginally in May and June as India eased lockdown curbs. Eicher Motors’ sales fell 70% year-on-year to 59,398 units during the reported quarter, with most of the sales coming in June.
“The previous quarter put forth unprecedented challenges for the industry and for Eicher Motors,” Managing Director Siddhartha Lal was quoted as saying in a media statement. “Towards the end of the quarter we’ve witnessed encouraging consumer sentiment which was evident in our sales for June. We believe this trend will continue into this quarter as well.”
Royal Enfield said initial consumer sentiment since the restart of operations has been “encouraging”. Bulk of the demand, it said, is being generated from semi-urban and rural towns. “There is pent -up demand and we are optimistic about stronger recovery once supply chain stabilises,” Chief Executive Officer Vinod Dasari was quoted as saying in the statement.
Shares of Eicher Motors closed 2% lower ahead of the quarterly results, compared with a flat Nifty 50 index.