NEW DELHI: Four of India’s biggest Auto companies—Hero MotorCorp, Eicher Motors, Motherson Sumi and Ashok Leyland—have all reported either a net loss or a steep fall in profit during the first quarter (Q1FY21). In fact, except for Hero, the other three recorded a net loss. The industry has collectively blamed the Covid-19 pandemic and subsequent lockdowns for the tepid performance.
Hero MotoCorp’s standalone net profit plunged 95.12 per cent to Rs 61.31 crore against a net profit of Rs 1,257.34 crore a year ago. Revenue from operations stood at Rs 2,971.54 crore, down 63 per cent. Auto components maker Motherson Sumi (MSSL) reported a consolidated net loss of Rs 1,191.65 crore.
Similarly, Royal Enfield maker Eicher Motors, which hadn’t had a negative bottom-line over the last decade, also posted a net loss of Rs 55 crore for the quarter against a net profit of Rs 452 crore in the same period last year. Eicher’s revenue from operations declined 66 per cent. Eicher Motors’ share price crashed over 7 per cent to Rs 20,124 on the BSE on Friday.
Vinod K. Dasari, CEO, Royal Enfield said that the initial consumer sentiment over the past two months has been very encouraging. “There is pent up demand and we are optimistic about stronger recovery once supply chain stabilizes,” he said. MSSL Chairman Vivek Chaand Sehgal said that even though the first quarter was a washout, economies have started witnessing green shoots of recovery. “In quarter two, a stronger demand is being seen,” he noted.