Motilal Oswal: Eicher Motors Posts In-Line Results; Inquiry And Booking Trends Up, Supply-Side Issues Being Addressed
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Motilal Oswal Report
Eicher Motors Ltd. achieved Ebitda breakeven at less than 20% utilisation despite offering one-time incentives.
With positive trend on inquiries and bookings, the supply side needs to normalise considering the upcoming major product launches in September 2020.
Consolidated revenues/ Ebitda declined approximately 66%/99%,translating to recurring loss of Rs 552 million. Royal Enfield’s Q1 FY21 realisation grew 4.8% YoY (flat QoQ) to approximately Rs 134.3k (estimate Rs 137.6k).
It was restricted due to a one-time incentive scheme post the unlocking of the economy. Standalone gross margins declined approximately 780 basis points YoY (down 540 basis point QoQ) to approximately 38.1% (estimate approximately 44.3%).
This was ascribed to an approximately 400 basis point impact from a one-time incentive and the BS-6 cost inflation not being entirely passed on.
Standalone Ebitda was reported at Rs 12 million (estimate approximately Rs 29 million). Higher other income restricted adjusted profit after tax decline to approximately Rs 123 million (versus estimate loss of approximately Rs 58 million).
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