The Q1 results topped predictions, and Eicher Motors’ share price increased by 5%. The stock was one of the top gainers on the Nifty 50.
The share price of Eicher Motors, which had opened at ₹4,805.65, moved up to ₹4,839.90 on Friday, closing at ₹4,576.90, a gain of more than 5%.
Post-market hours on Thursday, Eicher Motors released its Q1 performance report. Its net profit for Q1FY25 rose from ₹918 crore to ₹1,101 crore, a 20% rise from the same period the previous year.
The commercial vehicle manufacturer experienced a 10.2% growth in operating revenue to ₹4,393 crore in the first quarter of the current fiscal year.
According to Eicher Motors, their quarterly net profit and EBITDA were the greatest they had ever been. “EBITDA” refers to earnings before interest, taxes, amortization, and depreciation.
In the June quarter, Eicher Motor’s EBITDA climbed 14.2% to ₹1,165.5 crore from ₹1,021 crore during the same time the previous year.
Instead of rising by 25.6% over the same period last year, the margin climbed by 26.5%.
Q1 performance
Kotak Institutional Equities analysts stated that Eicher Motors’ consolidated EBITDA was 6% higher than anticipated, driven by a higher-than-expected average selling price and gross margin.
Despite a 1% YoY drop in volumes, the average selling price of Royal Enfield increased by 9% YoY. Because of a richer mix, RE’s margins also held steady despite the modest volume rise.
In anticipation of the holidays, management anticipates that domestic demand will increase as a result of its recent launches.
However, Eicher Motors’ Q1 EBITDA was consistent with Jefferies’ projections.
The Bottom Line
Analysts at Kotak Institutional Equities predicted that the company’s 250 cc industry growth trajectory would stay below Street projections since the domestic demand trajectory has not shown a significant improvement following the several new releases. Given that there aren’t many reasons for customers to switch to the higher cc class in terms of drive and features compared to premium price, they believe that the Guerrilla 450’s introduction will only slightly affect its volume growth.
