Eicher Motors Q1 results update!
Last updated: 13 Aug, 2020 | 04:49 pm
- Results below estimates: Eicher Motors has reported a loss of Rs 55 crore in Q1FY21, as compared to a profit of ₹453 crore in the same period previous fiscal. Analysts had earlier estimated a profit of about ₹25 crore.
- Sales tumble: The month of April had been a complete washout for the auto sector. Eicher Motors’ revenue from operations plunged by more than 66% on-year to ₹818 crore. Royal Enfield sold 58,383 motorcycles in the quarter, a decline of 68% from 181,966 motorcycles sold over the same period in FY 2019-20.
- Green shoots: “Covid-19 has impacted the normal business operations of Eicher Motors by way of interruption in production and supply chain during the lock-down period.” The company’s manufacturing units resumed operations on May 06, 2020 after being suspended on March 23, 2020. However, the firm is seeing encouraging signs of recovery.
Q1FY21 results were expected to be weak for auto-makers given a complete washout in April, and throttled supply chain in May. However, the last two months of June and July have seen a rapid recovery in sales for two-wheelers and truck manufacturers. The company has said that it witnessed encouraging consumer sentiment towards the end of Q1FY21, which was evident in its sales for the month of June. Demand from semi-urban and rural towns have picked up well, and the Royal Enfield-maker is optimistic about capturing this.
Consensus recommendation: Hold (Based on views of 43 analysts from external research institutions)