Eicher Motors reports profit of Rs 1,827 crore in FY2020, down 17%

Eicher Motors (EML) reported its financial result for FY2020, with revenue of Rs 9,154 crore, down 7 percent YoY, while profit after tax (PAT) came in at Rs 1,827 crore, lower by 17 percent YoY, on the back of a “tough year.”

In Q4 FY2020, Eicher Motors’ revenue came at Rs 2,208 crore, down 12 percent YoY, PAT at Rs 304 crore (-44.2%) as compared to Rs 545 crore during the same period last year. During the quarter, Royal Enfield reported sales of 163,083 motorcycles (-17% YoY). During the year, the company sold 697,582 motorcycles, down 15 percent YoY. On the other hand, the company reported its motorcycle sales to international markets saw significant growth of 96 percent at close to 38,700 motorcycles, over the previous financial year.

Commenting on Eicher Motors’ performance, Siddhartha Lal, MD, Eicher Motors said, “This has been a tough year overall for the industry, and the global pandemic during the last quarter brought with it unprecedented challenges and disruptive changes. At Eicher Motors, we have witnessed the impact of this situation, but have chosen to focus on the opportunities within these problems. With commitment to our long-term plans, we moved swiftly to tackle the roadblocks, to safeguard our businesses and to do our bit towards relief and support measures. Now, as the lockdown is easing out, we see strong initial customer interest and confidence. Both at Royal Enfield and VECV, we have transitioned our entire product portfolio to the new BS VI emission norms, and also managed to sell our entire BS IV inventory well ahead of the mandated timeline. Our BS VI products have received great feedback from customers and we have planned a strong product line-up going forward. We have a strong balance sheet and cash position, a robust business model with a very focused approach, and an exceptional management team at Royal Enfield and VECV.”

Vinod K Dasari, CEO, Royal Enfield said, “Through a challenging year, Royal Enfield has remained focused on sharpening the customer experience with emphasis on seamless and differentiated brand interface. We have had the best-ever export performance in international markets during the year with a 96 percent increase as compared to last year. We have introduced new products and new initiatives to create better accessibility and build increased engagement. While new variants of the Bullet and Classic brought in more accessibility in product, the 600-plus new Studio Stores created accessibility in terms of reach and footprint and brought the pure motorcycling experience closer to customers."

The last quarter of this fiscal was particularly challenging in the wake of the unprecedented coronavirus pandemic. Royal Enfield says it suspended manufacturing and retail operations were suspended between March 23 and May 5, as per government directives. The company has since resumed operations, and more than 90 percent of its retail network is now operational.

During the year, Royal Enfield added 100 new Studio Stores, taking the overall retail touchpoints to 1,521 across India; at 921 dealerships and 600 Studio Stores. The company has also doubled its exclusive stores from 42 stores in 18 countries to 77 stores in 21 countries, with 10 stores were added during this quarter.

VECV gains market share in Heavy duty, Light-Medium duty segment
For its commercial vehicle business, VECV reported revenue of Rs 2,101 crore, down 35 percent, and PAT of Rs 26 crore in Q4 FY2020. VECV sold 11,629 trucks and buses in the quarter, a decline of 45 percent from 21,010 trucks and buses sold over the same period in the last financial year.

Speaking on the performance Vinod Aggarwal, MD and CEO VECV said “Commercial Vehicle industry reeled under pressure for most part of the last financial year with annual sales lower by 40 percent and Q4 FY2020 with 55 percent respectively. This quarter saw the commercial launch of our BS VI solution – Eutech 6. With this, we are in a distinctive position to offer a comprehensive BS VI platform to the customers which will enhance their productivity, efficiency and profitability. The ongoing global pandemic has further impacted the CV industry. Restrictions have been lifted in a phased manner at VECV plants, our dealers and suppliers. To aid recovery, we have also extended support to our suppliers and channel partners to help them tide over this challenging situation. Channel inventories were at an all-time low which helped them in managing their working capital better. Despite the annual industry market drop of 40 percent, VECV declined by 33 percent, and during this difficult time the silver lining was that our market share increased to 5.9 percent in Heavy Duty and close to 30 percent in Light and Medium Duty.”

“New innovative methods and digital tools are being deployed to connect with the customers and help restart their business. While the current situation is definitely tough and industry will take time to get back on track, VECV has developed responses for various scenarios to emerge stronger in the future,” concluded Aggarwal.