Icon times
Eicher Motors Q1FY22 Result Analysis

Eicher Motors Q1FY22 Result Analysis

Published on 19 August 2021 Views 66 Comments 0

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.

VECV

  • 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.

Electrification

  • 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.
Attachments
File Name
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs 7499/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

LATEST UPDATE

premium Premium
free Free
Read More

REPORTS


Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya