Eicher Motors' Q2 consolidated profit declines 40% to ₹343 crore1 min read . Updated: 12 Nov 2020, 05:42 PM IST
- The company’s revenue from operations in the quarter stood at ₹2,134 crore, down 2.65% YoY on account of lower sales of Royal Enfield motorcycles and commercial vehicles
MUMBAI: Eicher Motors Ltd on Thursday reported a 40% decline in its consolidated net profit to ₹343 crore in the September quarter. The company’s revenue from operations in the quarter stood at ₹2,134 crore, down 2.65% YoY on account of lower sales of Royal Enfield motorcycles and commercial vehicles.
Eicher Q2 earnings beat Bloomberg poll estimate, which expected the company to report profit at ₹335 crore and revenue at ₹2,092 crore.
The company sold 150,519 motorcycles in Q2 as against 166,709 units a year ago. It’s CV unit, Volvo Eicher Commercial Vehicles (VECV) sold 8167 units in Q2, down 28% YoY.
According to Siddhartha Lal, managing director of Eicher Motors, Q2 witnessed a healthy demand and pick-up in business activities in the auto industry.
“It has been encouraging for our motorcycle business at Royal Enfield as we have seen increased revival in consumer sentiment and demand. We have a robust order book and booking numbers are ahead of pre-covid levels," Lal said, adding that the company is working to ensure sustainable volumes in the forthcoming quarters.
Vinod K. Dasari, CEO, Royal Enfield said the company has expanded its distribution network during Q2 by adding 25 new stores and 133 studio stores across India, and six new exclusive stores overseas.
For the quarter ended September, the company said VECV’s revenue from operations dropped 13% to ₹1,703 crore against ₹1,955 crore in Q2 last year.
“Despite the drop in revenues, the Ebidta margin improved to 6.9% for the quarter against 5.4% during corresponding quarter for the last year due to stringent cost reduction measures being undertaken," the company said in a note.
“We see initial signs of revival in the CV industry. We are witnessing good demand from niche segments such as construction, mining, agriculture and e-commerce amongst others. We are also positive on revival in the replacement demand that had been muted for the last two years. Based on these factors, the outlook for the CV industry is positive for the second half of the current year," said Vinod Aggarwal, managing director and chief executive officer at VECV.