Eicher Motors Q3 results: Net profit falls 14% to Rs 456 cr, revenue up 2%

Eicher Motors, the parent company of Royal Enfield, on Monday reported a 14.5 per cent year-on-year decline in its consolidated net profit for October-December quarter at Rs 456 crore, hit by the ongoing global shortage of semiconductors and the third wave of COVID-19 pandemic.
 
The automobile company's total revenue grew 1.9 per cent to Rs 2,881 crore during the quarter under review, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 13.4 per cent to Rs 582 crore.
 
Royal Enfield sold 1,67,664 motorcycles during the quarter, a decline of 15.6 per cent from 1,98,557 motorcycles sold over the same period in the previous year.
 
"The ongoing global shortage of semiconductor chips and the onset of the third wave of Covid with Omicron, impacted the third quarter results," the company said in a release.
 
VE Commercial Vehicles Ltd (VECV), a subsidiary of the company, reported a profit of Rs 66 crore during the quarter as against Rs 57.7 crore a year ago.
 
"For the quarter ended December 31 2021, VECV's revenue from operations was Rs 3,625.7 crore, up by 35.3 per cent from Rs 2,680 crore in the same period last year. Despite huge challenges due to inflation, VECV generated an EBITDA of Rs 241.6 crore, at 6.7 per cent EBITDA margin even though it was lower as compared to 8.4 per cent (Rs 225.5 crore) in the corresponding quarter of the previous year," the release said.

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Commenting on the results, Eicher Motors MD Siddhartha Lal said that the company is working towards creating an alternative vendor ecosystem to mitigate the impact of chip shortage on the supply front.
 
"Our growth momentum at Royal Enfield continues to remain stable, highlighted by persistent good performance in the international markets. Performance across Europe and Americas has consistently registered growing trends, and we continue to deepen presence and engagement in these markets," Royal Enfield Executive Director B Govindarajan said.
 
The company's thrust on the non-motorcycling business continues to show strong results, with the division registering a 29 per cent year-on-year growth, he said.
 
"We have robust plans for both apparel and accessories business, and will continue to enable options for self-expression and personalisation for our consumers. Moving forward, we are optimistic that supply chain constraints will gradually ease out over the next two quarters and production to stabilise over time," Govindarajan added.
 
Shares of Eicher Motors ended 1.08 per cent lower at Rs 2,568.55 on the BSE on Monday.

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