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Eicher Motors Q1FY22 Result Analysis

Eicher Motors Q1FY22 Result Analysis

Published on 19 August 2021 .Views 84 .Comments 0
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Q1FY22 results

  • Revenue from operation for the company stood at Rs. 1974.3 crores. Though the revenue increased by 141.3% on YoY basis due to lower base in Q1FY21, on QoQ basis the revenue has declined by (-32.8%).
  • The operating profit for the company stood at Rs. 485 crores, registering a YoY growth of 3x and QoQ decline of (-35.2%).
  • The operating margins for this quarter stood at 25%. In Q1FY21 and Q4FY21 the operating margins were 14% and 25% respectively.
  • Profit Before tax stood at Rs. 367 crores in Q1FY22. The company posted a huge YoY growth for the same as it was just Rs. 14.7 crores in Q1FY21. On QoQ basis, the PBT has declined by (-41.8%).
  • Profit after tax stood at Rs. 237.13 crores. The company faced a loss of (-55 crores) during Q1FY21. PAT has declined by (-54.9%) on QoQ basis.

Business Highlights

  • Best ever quarterly performance in exports markets. 4 fold increase YoY and 28% increase QoQ for exports.
  • Trucking industry extremely difficult Q1FY22. VCEV YoY 161% domestic market and 189% in international market, due to lower base.
  • Forsee challenges easing out.
  • Supply of parts and components with growing commodity prices continues to be an issue. Particularly semi-conductor shortage which is affecting the company.
  • Demand position in motorcycle is strong.
  • The company does not give forward guidance.
  • Strong demand position and order book.
  • Improving production is the key.
  • Main bottle neck is to increase production is semiconductor shortage.
  • Gross profit improved on model mix and international mix.
  • Pricing action has started giving results.
  • Exports business is sustainable.

Royal Enfield Highlights

  • 1.22 lakh units of motorcycles sold which is 2x compared to previous quarter last year.
  • Highest ever export at 17,500 units.
  • Sales impacted due to lockdown and COVID second wave.
  • Market share remain steady at 28%.
  • The sales of accessories, apparel and spares delivered strong growth. On track to increase the share of non-motorcycle division to 20% of the total revenue.
  • Production impacted due supply side issues and lockdowns.
  • Retail network increased. 140 stores outside India.
  • Good response to Royal Enfield Meteor.
  • Expect production sales to scale up in H2FY22.


  • Revenue for VECV stood at Rs. 1,639 crores, growth of 156% from low base last year.
  • EBITDA at Rs. 18 crores compared to loss of Rs. (-72) crores last year. EBITDA margin stood at 1.1%.
  • Net loss of Rs. (-72 crores) as compared to Rs. (-120 crores) loss in Q1FY21.
  • Volumes were at 5,800 units, growth of 173% form Q1FY21.
  • Second wave has impacted the business in commercial vehicles.
  • Doing good in CNG where focus is through Light and Medium duty trucks. The company is Strengthening portfolio in CNG variants.


  • For mid-size segment, EV transition would be a long term process of upto 5-7 years.
  • Capable team working on consumer, technology and business side.
  • Confident about approach to EV.
  • Quality of motorcycle is more important then number of models launched.
  • Price value equation is not good currentlu. Equivalent EV is still double the price when compared to petrol bike.

Chip shortages

  • Turbulent environment in chip supply
  • General trend currently is step by step improvement in supplies for the company.
  • Activated additional suppliers over a year ago.
  • For next months, peak requirement of chips would not come.

Price Increases

  • Commodity headwinds would continue.
  • The company will need to take pricing actions in coming quarters.
  • The company has covered up the commodity price increases with increase in prices.
  • Penetration post covid continued to be around 45%-47%.

Export Business

  • Plans to become global leader in mid-size market and grow the mid-size market.
  • Developing products through a global market perspective.
  • Dealers are approaching the company for business.
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