Eicher records 3.4 percent increase in Q1 total income

May 14, 2013: Eicher Motors has reported its best-ever quarterly total income from operations at Rs 1,724.3 crore, up 3.4 percent over Rs 1,668.2 crore in Q1 2012. Siddhartha Lal, managing director and CEO, said: “The commercial vehicle industry has been in the midst of a cyclical down-cycle and that has impacted all players including VE Commercial Vehicles. However, VECV posted a strong financial performance in tough market conditions as a result of its sharp focus on managing costs and working capital.”

This has resulted in a record increase of 98.1 percent in earnings before interest and tax (EBIT) for Eicher Motors’ standalone at Rs 53.1 crore in Q1 2013 over Rs 26.8 crore in Q1 2012. In addition, Royal Enfield has been able to get good operating leverage in Q1 2013. It has managed to restrict costs as a result of which the best ever operating margin has been recorded at 15.9 percent.

Eicher Motors sold a total of 12,529 units in the quarter as against 14,289 units in the year-earlier quarter. This comprises 2,109 heavy duty trucks in Q1 of 2013 as against 2,291 units in Q1 of 2012. In the 5-14-tonne segment, Eicher sold 2.188 units as against 2,043 units in the year-earlier quarter. The company sold 141 Volvo trucks in the quarter as against 94 in the year-earlier quarter.

For Royal Enfield as well, Q1 2013 has been the best ever quarter with record sales of 34,736 units, a growth of 45.3 percent over the year-earlier quarter. The company recently inaugurated a new 150,000 unit capacity plant at Oragadam, set up at Rs 150 crore. Lal said, “With its second plant commencing commercial production, Royal Enfield is now prepared for its next level of global growth. The new facility has been created with a master-plan that can take the eventual production to over 500,000 units per year. With the speedy execution of the first phase of the plan, we will now have a capacity of 175,000 motorcycles in 2013, from both plants.” Royal Enfield launched the new Bullet 500 in a phased manner in February 2013. The Continental GT will be launched later this year. Many of its models have a waiting period, some running to nearly nine months to a year.

Photograph: Siddhartha Lal, managing director and CEO, Eicher Motors, with Job 1 from the new Royal Enfield plant at Oragadam on April 30.

BRIAN DE SOUZA