Eicher Motors Q1 net rises 42%

Truck, bus and two-wheeler maker Eicher Motors today reported 42% rise in consolidated net profit in the quarter ended March driven by robust demand for the Royal Enfield range even as demand for commercial vehicle remained subdued.

The Delhi-based company posted consolidated net profit of Rs 139.12 crore for the reporting quarter as against Rs 97.94 crore posted in the corresponding quarter last year.

Net consolidated sales rose to Rs 1,899.91 crore during the quarter, an increase of 11% as against Rs 1,708.60 crore posted in the same quarter last year.

Sale of Royal Enfield motorcycles rose 85% to 64,268 units as against 34,736 units sld in the same quarter last year. Sales of commercial vehicle dipped 20% to 9981 units as compared to 12529 units.

Siddhartha Lal, Managing Director & CEO, Eicher Motors, said, "The commercial vehicle industry continues to battle the enormous downturn that has been affecting this sector for more than 30 months now. The first quarter of 2014 has been particularly tough that saw the domestic industry (5 tonne and above) decline by 18.3%. But the market should bounce back this year itself."

While the consolidated EBITDA margin stood at 9.1% during the quarter, that of stand-alone returned a margin of 21.4%, the company said.

The company is gearing up to launch 11 new truck models this year having 21 variants between them. These will include trucks from the Pro 6000 and Pro 8000 series. Eicher hopes to benefit from the uptick in demand expected later in the year.

Eicher is investing around Rs 2,000 crore this year and next as capital expenditure in trucks, buses, two-wheelers and the joint venture with US-based off-road vehicle specialist Polaris. Around Rs 1,300 crore will be spent by VECV and Rs 600 crore on Royal Enfield.

Lal also said that Royal Enfield will be raising the production capacity of the newly launched bike Continental GT (Cafe Racer) at the new plant in Oragadam, Tamil Nadu. This new bike, according to Lal is 'very well received' in the international markets such as the US and UK.

The company is putting a new line of manufacturing at the plant to raise the capacity from 10,000 per month presently and around 280,000 per annum. The company would raise the capacity to 500,000 units per annum after expansion. At present the waiting period on Royal Enfield models range from 2-6 months.