Chennai-based two-wheeler and commercial vehicle maker Eicher Motors (EML) today announced its financial results for the Q1 FY2020, the consolidated revenue at Rs 2,382 crore, was down 7 percent YoY.
The EBITDA was Rs 614 crore, (-24%) compared to Rs 810 crore in Q1 FY 2019; Profit After Tax at Rs 452 crore (-21%) as compared to Rs 576 crores for the same period last year.
During the first quarter Royal Enfield sold 181,966 motorcycles, witnessing a decline of 19 percent from 225,286 motorcycles sold for the same period last year. In the commercial vehicles segment, VE Commercial Vehicles (VECV), Eicher’s joint-venture with AB Volvo - continued to be affected slowdown in demand. The company sold 13,331 trucks and buses in the quarter, registering a decline of 18 percent over the same period last year.
In the quarter, VECV’s revenue from operation came at Rs 2,255 crore (-14%) from Rs 2,609 crore for the same period last year; EBITDA declined by 48 percent to Rs 125 crore (Q1 FY2019 Rs 240 crore); PAT at Rs 38 crore, declined by 68 percent.
Royal Enfiled to introduce new products, VECV sees pre-buying for BS IV CVs
Commenting on Eicher Motors’ performance, Siddhartha Lal, MD, Eicher Motors, said, “The two-wheeler and the CV industry continue to face headwinds on account of weak consumer demand. Sales of Royal Enfield motorcycles declined 19 percent on YoY basis during the quarter. However, our 650 Twins continue to do extremely well in India as well as across international markets and we are ramping up production to cater to the enthusiastic response that the 650 Twins have received since their launch.”
“Our preparedness for the BS-VI transition continues to be on track and we are on course to meet regulatory timelines. In the CV industry, sales have been low due to the weak demand on account of economic slowdown and liquidity and it is also witnessing heavy discounting. However, as a part of our long term commitment to drive modernisation in the CV industry, VECV unveiled the Eicher Pro 2000 series, India’s first BS VI compliant range of CV’s. With several industry first modern features, the new Pro 2000 range makes VECV the first CV company to be BS VI compliant, driving modernisation in the CV segment in India and other developing markets,” added Lal.
Commenting on Royal Enfield’s performance, Vinod Dasari, CEO, Royal Enfield said, “The demand in two-wheeler industry remains weak due to slowing economic growth, tightening liquidity and regulation driven price increases that have led to poor consumer sentiment. At Royal Enfield, we remain focused on our key priorities, which is to deepen our markets in India and to strengthen our position as a global consumer brand. To reinforce our distribution network in India, we are working on building a network of compact retail format stores. Royal Enfield Studio Stores will be an important step towards building better accessibility across smaller towns and cities in India and allowing discerning consumers to experience the complete Royal Enfield pure motorcycling ecosystem. We will also be introducing new motorcycle variants in the coming months to widen our offering and provide greater accessibility to our discerning customers.”
Commenting on VECV’s performance, Vinod Aggarwal, CEO, VECV said “The auto industry is currently going through a very challenging phase. Both domestic as well as export market, have been severely impacted with a drop of more than 20 percent in Q1 FY2020. The decline in market similarly impacted VECV, as our sales also dropped by around 18 percent in the quarter. Overall industry’s sentiments are down with an increase in fuel prices, lower availability of loads due to slowdown in economy and consequently low replacement demand. We expect some pick up to happen from September with the onset of the festive season and also anticipate to see some positive impact of pre-buying with BS VI norms becoming applicable from April 1, 2020. Last quarter, VECV unveiled India’s first BS VI-compliant CV range with the launch of Eicher Pro 2000 series. VECV has a vast experience of over 6 years while supplying base engines for Euro-VI requirements of the Volvo Group that gives us an edge in tackling the challenges posed by the new engine technology.”