Earnings Outlook
Royal Enfield seen driving Eicher Motors Jan-Mar results
This story was originally published at 20:04 IST on 7 May 2025
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By Anand JC
MUMBAI – High demand for Royal Enfield motorcycles in India and abroad likely enabled Eicher Motors Ltd. to register a robust revenue growth for the March quarter, analysts said. An encouraging performance by its joint venture with the Volvo Group, VE Commercial Vehicle, is expected to aid its bottom-line growth in the quarter.
Eicher Motors is expected to report a consolidated net profit of INR 12.2 billion for the March quarter, up 14% on year and 4% sequentially, according to an average of estimates of 14 brokerages. The company's revenue is expected to grow 22% on year to INR 51.9 billion during the quarter. Sequentially, the top line is seen growing 4.4% during the reporting quarter.
Strong volume growth in its Royal Enfield business during the quarter-ended Mar. 31 in a tepid automobile demand environment is expected to have driven Eicher Motors' top-line growth. The company sold 311,498 units, motorcycles and commercial vehicles combined, during the March quarter, registering an on-year growth of 23%.
Just over 90% of Eicher Motors' overall sales come from motorcycle sales. The company sold 282,823 Royal Enfield motorcycles in the reporting quarter, up 24% on year. Commercial vehicles too saw a revival in the final quarter of 2024-25 (Apr-Mar), as 28,675 units were despatched to dealers during the quarter, up 11% on year. The sequential growth was a sharper 37%.
Sales of Eicher Motors' automobile units to dealerships in India grew 22% year-on-year, but exports registered a stronger 42% increase, in line with its industry peers. Royal Enfield's product mix in Jan-Mar included a higher share of Bullet models and those with a capacity exceeding 350 cubic centimetres.
The average selling price of Royal Enfield motorcycles went up in the March quarter on the back of a higher share of bikes with over 350cc, which are more expensive. Analysts at Emkay Global Financial Services said Eicher Motors continued to gain market share in the March quarter due to strong product launches and pricing discipline.
Eicher Motors' earnings before interest, taxes, depreciation, and amortisation for the March quarter is expected to be INR 13.1 billion, according to the average of estimates from 13 brokerages. The operating profit is seen growing 16% on year and 9% sequentially. Analysts at Ashika Stock Broking estimated a 15.2% on year rise in EBITDA to INR 13 billion due to higher utilisation and an increase in exports.
Axis Securities expects Eicher Motors' EBITDA margin to fall 176 basis points in the March quarter. The brokerage expects higher marketing and advertisement expenses to offset a favourable operating leverage for the reporting quarter, similar to the expectation of Kotak Equities. Eicher Motors had reported an EBITDA margin of 26.5% for the March quarter in FY24 and 24.2% in the December quarter. "Better mix and higher export penetration will be offset by the rise in ad spends towards the launch of new products, leading to margin contraction," Prabhudas Lilladher said.
The company will announce its March quarter earnings on May 14. Since disclosing its December quarter earnings on Feb. 10, shares of the company have grown roughly 3%. Wednesday, its shares ended at INR 5,489 on the National Stock Exchange, down 0.5%.
Following are the Jan-Mar consolidated earnings estimates for Eicher Motors Ltd. based on reports from 14 brokerage firms in descending order on the estimate of net profit:
Brokerage | Net sales (in INR mln) | Net profit (in INR mln) | EBITDA (in INR mln) |
Prabhudas Lilladher Pvt Ltd | 53,361.00 | 13,251.00 | 13,510.00 |
Nomura Equity Research | 52,207.00 | 13,241.00 | 13,071.00 |
Nuvama Wealth Management Ltd | 52,204.00 | 12,987.00 | 13,270.00 |
Elara Securities (India) Pvt Ltd | 51,659.00 | 12,859.00 | 13,006.00 |
Motilal Oswal Financial Services Ltd | 51,843.00 | 12,793.00 | 12,953.00 |
Ashika Stock Broking Ltd | 52,440.00 | 12,434.00 | 13,005.00 |
Kotak Institutional Equities | 52,188.00 | 12,310.00 | 12,905.00 |
Equirus Securities Pvt Ltd | 51,873.00 | 12,223.00 | 12,952.00 |
Emkay Global Financial Services Ltd | 51,107.00 | 11,873.00 | 12,568.00 |
JM Financial Institutional Securities Pvt Ltd | 51,998.00 | 11,647.00 | 13,468.00 |
HDFC Securities Ltd | 51,717.00 | 11,362.00 | |
Axis Securities Ltd | 51,850.00 | 11,280.00 | 13,380.00 |
ICICI Securities Ltd | 51,234.00 | 11,157.00 | 13,321.00 |
HSBC Global Research | 50,927.00 | 10,992.00 | 13,037.00 |
Average | 51,900.57 | 12,172.07 | 13,111.23 |
End
Edited by Saji George Titus
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