Eicher Motors Limited (EML), one of the leading names in the automotive industry, announced its impressive Q1 FY2024 results on August 3rd, revealing a 50% surge in net profit to ₹918.34 crore. This strong growth is attributed to softer commodity prices, inventorization benefits, and a positive spike in the sales volumes of its popular bikemaking arm, Royal Enfield.
Highlights of the Quarter: Q1 FY2024
- Net Profit: EML’s consolidated net profit zoomed 50% to ₹918.34 crore from ₹610.66 crore in Q1 FY2023.
- Revenue Growth: The company witnessed a 17% YoY growth in consolidated revenue, reaching ₹3,986 crore as compared to ₹3,397.46 crore in the previous year.
- Best-ever Performance by Royal Enfield: With 227,706 units sold in the April-June quarter, the growth stood at 22% YoY. Domestic sales soared by 31% to 207,171 units, although exports saw a decline of 31% to 20,535 units.
- Analysts’ Expectations Surpassed: The results exceeded the average estimates of analysts, who predicted a 33% rise in net profit and 17% increase in revenue.
- Share Price Movement: Eicher’s shares jumped 1.41% to ₹3,380.10 on the BSE before the results were announced.
Eicher Motors Q1 FY2024: Key Financial Metrics
- Sequential Improvement: On a sequential basis, Eicher’s PAT and revenue improved by 1.4% and 4.78% respectively.
- Margin Growth: The consolidated margin came in at 25.6%, higher than the estimated 24.5%.
- Earnings Per Share (EPS): EPS improved to ₹33.57 from ₹33.11 in the previous quarter and ₹22.33 in Q1 FY2023.
Contributing Factors
The growth of Eicher Motors has been multi-faceted. Royal Enfield’s success contributed to a major part of the growth, with the bikemaker recording its best-ever Q1 performance. The increase in domestic sales coupled with the benefits from softening commodity prices and inventorization boosted the company’s financials.
VE Commercial Vehicles (VECV), Eicher’s joint venture with the Volvo Group, also marked its highest-ever sales and revenue for Q1. Vinod Aggarwal, MD, and CEO of VECV pointed out that they outperformed industry growth, witnessing a growth of 12% in sales.
Also read: Eicher Motors Share Price Target 2023 to 2030
A Word from the Leadership
Siddhartha Lal, Managing Director & CEO, Eicher Motors, expressed his satisfaction with the results, stating, “Q1 has been significant for Eicher Motors as both Royal Enfield and VECV have registered their best ever first quarter performance, and have recorded tremendous growth.”
Conclusion
Eicher Motors’ Q1 FY2024 results mark a significant milestone in the company’s journey. The robust growth in profit and revenue, especially from Royal Enfield and VECV, highlights the strategic alignment of the company’s operations with market trends. With the continued focus on product innovation and market expansion, Eicher Motors seems poised for further growth in the upcoming quarters.
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