India’s Eicher Motors Ltd, the maker of Royal Enfield motorcycles, posted a bigger-than-expected 62.4% jump in third-quarter profit on Tuesday, helped by higher motorcycle sales.
The company’s consolidated net profit rose to 7.41 billion rupees ($89.6 million) in the three months ended Dec. 31, from 4.56 billion rupees a year ago.
Analysts, on average, had expected a profit of 7.24 billion rupees, according to Refinitiv data.
Sales of Royal Enfield, which generates most of Eicher’s revenue, jumped 31% to 219,898 units. The company, in its earnings release, did not mention if it raised prices in the quarter.
Its peers, on the other hand, did hike prices, which helped the likes of TVS Motor Co Ltd, Bajaj Auto Ltd and Hero MotoCorp Ltd beat profit estimates.
Meanwhile, sales of Eicher- and Volvo-branded trucks and buses, a business run in a joint venture with Sweden’s AB Volvo , rose 13.2% to 18,162 units.
Eicher’s total revenue from operations rose nearly 30% to 37.21 billion rupees, roughly in line with analysts’ expectations of 37.16 billion rupees.
Total expenses rose 24.4% to 30.06 billion rupees, led by a 39% increase in the cost of raw materials and components.
Eicher’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, a key profit metric, rose to 23% from 20% a year ago.
“Though Royal Enfield’s exports have picked up pace, demand could be under pressure in the near-term given the global recessionary scenario,” Himanshu Singh, research analyst, Prabhudas Lilladher, said.
“We remain positive on Eicher Motors given its successful model launches, pending model launches and customer preference for premium bikes,” Singh added.
Eicher’s shares closed down 2.4% at 3,175.7 rupees on the day. They rose 24.5% in 2022, compared with a 15.3% rise in the Nifty Auto index.
($1 = 82.7500 Indian rupees)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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