Eicher Motors rallies 5% on better than expected Q3 earnings
Published On: Wednesday, February 15, 2023 | By: Team KnowMyStock
Shares of Eicher Motors, the maker of Royal Enfield motorcycles, rallied 5 percent to Rs 3,340 on the BSE in Wednesday’s intra-day trade in an otherwise subdued market after the company posted a better-than-expected 62 percent year-on-year (YoY) jump in net profit at Rs 741 crore, from Rs 456.13 crore a year ago. on the back of higher motorcycle sales and other income. On a sequential basis, net profit grew 5.7 percent. The revenue from operations came in at Rs 3,721 crore, registering a growth of 29.17 percent from Rs 2,880.65 crore in the corresponding quarter last year. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, a key profit metric, stood at 23 percent, up 300 bps YoY and down 30 bps QoQ.
The motorcycle volumes of Royal Enfield increased 31.15% at 219,898 units in Q3 FY23 from 167,664 units in the year-ago quarter. VE Commercial Vehicles (VECV), the joint venture between Eicher Motors and Sweden's AB Volvo, recorded the highest-ever third-quarter sales at 18,162 units, a jump of 13.2% over 16,044 units sold in the corresponding quarter of the previous fiscal.
“With these motorcycles, and with upcoming launches at Royal Enfield, we intend to bring a strong and compelling portfolio in the middleweight segment which has immense growth potential in markets around the world," stated Siddhartha Lal, MD of the company.
"We continue to remain focused on expanding our distribution and service network and delivering consistent uptime to our customers," he added.
Even as Eicher Motors missed margin projections in the third quarter of the fiscal year, most analysts recommend buying the automaker’s shares as they expect margins and market share to expand in 2023.
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