Eicher Motors reports 72% rise in Q4 net profit on robust sales of Royal Enfield

Eicher Motors, niche bike maker of Royal Enfield, has reported a consolidated net profit that jumped by 72 per cent to Rs 335 crore for the quarter ended December 31, 2016 as against Rs 195 crore for the corresponding quarter of the previous year.

The company’s revenue has grown by 44.6 per cent at Rs 3,316.57 crore  and EBITDA has grown by 75 per cent to Rs 640 crore as compared to Rs 366 crore in Q4FY16 along with EBITDA margin expanding by 270 bps to 17 per cent due to high sales of Royal Enfield.

Segment wise, Royal Enfield sales have grown by 60 per cent in the January-March quarter, and has seen its margins hit a record high of 29.8 per cent; whereas commercial vehicles segment also has posted a healthy sales growth of 38 per cent in Q4FY16 taking the margins higher by 8 per cent.

For the 15 month period ending March 2016, the company has reported consolidated net profit of Rs 1,451.9 crore; total income from operations at Rs 15,688.7 crore, operating profit (EBIT) at Rs 1,995.6 crores and EBIT margin at 12.7 per cent.

The company has changed its financial reporting period from calendar year to financial year. Therefore, the numbers for the 15 month period (January 1, 2015- March 31, 2016) are not comparable to the immediately preceding calendar year period (January 1 - December 31, 2014).

However, the company has given comparable consolidated data of last twelve month period ending March 31, 2016 as compared to twelve month period ending March 31, 2015. Consolidated net profit has jumped by 62.2 per cent to Rs 1,235.7 crore and total income from operations has grown by 39.8 per cent to Rs 13,120.7 crore. Operating Profit (EBIT) has grown by 69 per cent at Rs 1,706.4 crore along with Operating Margin (EBIT margin) expanding by 220 bps at 13 per cent.

As per their press release, Mr.Siddhartha Lal, MD & CEO, Eicher Motors Ltd. said, “Royal Enfield has been investing in building strong foundations across all areas of its business. We will be investing Rs 600 crores towards product development, setting up of the two technical centres in Leicestershire, UK; and Chennai, India enhancing our manufacturing capacity and market development activities across geographies. In FY 2016-17, we plan to manufacture 675,000 motorcycles. Our immediate business outlook remains strong and Royal Enfield continues to grow consistently, competitively and profitably towards leading and expanding the mid-sized motorcycle segment globally.”

Today stock price closed at Rs 59.05 or 0.30 per cent higher at Rs 19687.45 per share.