New launches to drive strong recovery for Eicher

“EIM’s second quarter FY21 performance has been strong, especially considering it was trailing in terms of volume recovery due to supply-side issues. 
Image Courtesy: eicher.in
Image Courtesy: eicher.in

NEW DELHI:  Eicher Motors, the maker of Royal Enfield bikes, has reported a 40 per cent decline in its consolidated net profit at Rs 343.34 crore in the second quarter ended September as against Rs 572.69 crore reported in the corresponding quarter last fiscal. Revenue from operations fell three per cent year-on-year to Rs 2,133.60 crore, with its brand Royal Enfield seeing a sharp 9 per cent plunge in sales volumes to 1.49 lakh motorcycles during the quarter.

Despite a sharp dip in profit, however, the company’s stock had hit a fresh 52-week high of Rs 2,465, up five per cent, on the BSE on Friday after the company reported strong order book and its plans on ramping up production. “EIM’s second quarter FY21 performance has been strong, especially considering it was trailing in terms of volume recovery due to supply-side issues. 

Going forward, strong booking and inquiries, positive initial response to Meteor, and normalised production would support volume recovery,” said analysts at Motilal Oswal. They added the upcoming products would help expand addressable markets and drive the next phase of growth. Royal Enfield said it has an order backlog of 1.25 lakh units (including 8,000+ Meteor bookings) with a one-month average waiting period.

According to the company, production is also back at pre-COVID levels with capacity of a million units. In its earnings call, the management said production was slow because of the underlying supply issue from vendors, especially from Aurangabad and Pune region but by the end of the last quarter they reached to pre-COVID levels. 

“We have a robust order book and booking numbers are ahead of pre-covid levels. We are working to ensure sustainable volumes in the forthcoming quarters,” said Siddhartha Lal, Managing Director of Eicher Motors Ltd.

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