Eicher Motors Q3 Results: Profit Rises 7%, Revenue Up 19% As Sales Pick Up

Eicher Motors Ltd.’s quarterly profit rose for the first time in the ongoing fiscal as sales picked up on festive push after the nation lifted the lockdown curbs.

Net profit for the maker of Royal Enfield motorcycles rose 7% year-on-year to Rs 533 crore in the quarter ended December, according to an exchange filing. That compares with the Rs 535-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue, too, jumped 19% over the year earlier to Rs 2,828 crore, in line with the estimated Rs 2,810 crore.

Eicher Motors Q3 Results 2020-21: Other Highlights (YoY)

• Earnings before interest, tax, depreciation and amortisation rose 14% to Rs 673 crore.

• Operating margin, however, contracted to 24% from 25%.

“The third quarter has seen steady business growth and encouraging performance across the board. Consumer sentiment and demand have improved, and this is reflected in our volumes for the quarter,” Siddhartha Lal, managing director at Eicher Motors, said in the statement.

Sales for Royal Enfield rose 5% over the year ago to 1.99 lakh units in the December ended quarter. Its exports jumped 44.4% to 12,234 units during the period.

That came as automakers, grappling with a prolonged slowdown even before the pandemic, ramped up production to make up for the washout in the initial days of the lockdown. Peers Hero MotoCorp Ltd. and Bajaj Auto Ltd., too, reported a rise in profit and revenue, aided by a recovery in demand during the festive season and preference for personal mobility.

“This quarter has been encouraging as we have exceeded pre-Covid production levels and had our best-ever December performance till date,” Vinod K Dasari, chief executive officer, Royal Enfield, said in the statement.

The firm, according to Dasari, has been able to stabilise its supply chain to some degree, but there are a few issues with erratic supplies as well as increase in logistics and commodity costs.

Eicher Motors’ commercial vehicles business, the worst-hit segment for automakers, also has started to witness recovery. Volvo Eicher Commercial Vehicles Ltd. reported a 3% year-on-year jump in domestic sales in December—the first time in the ongoing financial year.

Still, shares of Eicher Motors were trading 1.74% lower after the results were announced, compared with a 0.13% drop in the benchmark NSE Nifty 50 index.