Eicher Q2 profit rises 38% at Rs 76 cr

Commercial vehicle maker Eicher Motors today reported 38.29% jump in its consolidated profit for the quarter ended June 30 at Rs 76.31 crore on account of good sales of its products across all verticals.

The company had posted a profit of Rs 55.18 crore in the corresponding period last year.

The consolidated total income from operations during the second quarter also increase by 25.03% to Rs 1,298.42 crore from Rs 1,038.48 crore in the year-ago period.

"We have witnessed very strong growth in all segments like heavy duty, light and medium duty, buses and motorcycle business," Eicher Motors Managing Director and CEO Siddhartha Lal told PTI.

In the April-June period, the company sold 1,654 units of heavy commercial vehicles as against 1,034 units in the same period last year, up 59.96%, he added.

The company sold 7,036 units of light commercial vehicles in last quarter compared to 5,854 units in the year-ago period, up 20.19%.

Lal said the sales in the bus segment also increased by 15.23% to 2,217 units from 1,924 units in Q2, 2010.

"Sales of Royal Enfield motorcycles increased by 48.64% in last quarter to 18,581 units from 12,501 units in the year-ago period," he added.

When asked about the outlook, Lal said the company may witness some "muted" growth in the coming months due to rise in interest rates on auto loans.

Lal, however, said to cater to the growing demand of its products, the company is expanding the production capacity of its Pithampur facility in Madhya Pradesh by 10-15% within this year from the monthly 4,000 units at present.

"The production capacity will be increased to 8,000 units per month after our upcoming paint and stamping shop is ready by 2012," he added

The company had earlier announced an investment of Rs 500 crore along with its joint venture partner Volvo till 2013 to set up the paint and stamping shop and expand the overall vehicle assembly capacity.

The partners are also putting in Rs 300 crore in setting up a engine plant in Pithampur.

Eicher Motors' two-wheeler division Royal Enfield had said it will set up a new manufacturing facility at Oragadam, near Chennai, with an initial installed capacity of 1.5 lakh units per annum by March, 2013. The proposed 50-acre plant is likely to see a total investment of up to Rs 350 crore over the next five years.