Royal Enfield margins hit record high in Jan-March

Consistent rise in Royal Enfield sales and a recovery in commercial vehicles segment boosted strong operational performance of Eicher Motors   in January-March quarter. A 60 percent jump in Royal Enfield sales in the January-March quarter saw its margins hit a record high of of 29.8 percent in the period. Eicher Motors’ net profit rose by a whopping 71.3 percent at Rs 334.5 crore in January-March from Rs 195.3 crore in corresponding quarter last fiscal.

During the period, total income rose 46.6 percent at Rs 3765 crore against Rs 2568 crore on annual basis. EBITDA in the quarter was up 75 percent at Rs 640 crore compared to Rs 366 crore while EBITDA margin stood at 17 percent versus 14.3 percent year-on-year.

The auto company was expected to see net profit at Rs 345 crore in January-March quarter, up 76 percent (YoY) while revenue was seen jumping 55 percent at Rs 3978 crore. During the period, EBITDA was seen growing 77 percent at Rs 649 crore, according to a CNBC-TV18 poll.

The commercial vehicles segment also posted a healthy sales jump of 38 percent in the same quarter taking the margins higher at 8 percent.

In 2015-16, Eicher Motors has changed its financial reporting period from calendar year to financial year. Therefore, the numbers for the 15-month period (January 1, 2015-March  31, 2016) are not comparable to the immediately preceding calendar year period (January 1 -December 31, 2014).

Commenting on Royal Enfield’s performance, Siddhartha Lal, Managing Director & CEO said, "Royal Enfield has been investing in building strong foundations across all areas of its business. We will be investing Rs 600 crore towardsproducdevelopment, setting up of the two  technical centres,in Leicestershire, UK and Chennai, India, enhancing our manufacturing capacity and market  development activities  across  geographies. In FY 2016-17, we plan to manufacture 675000 motorcycles."

VE Commercial Vehicles grew by 38.1 percent outpacing. VECV posted strong growth in both the Heavy Duty segment and Light and Medium Duty segments. "

In April 2016, VECV’s Eicher branded Trucks and Buses forayed into the sub 5-ton category and launched the Eicher Pro 1049. We will be investing Rs 400 crore in VECV towards product development and capacity expansion in FY 2016-17," Lal added.

For the 15 month period ending March 2016 at consolidated level, Eicher Motors reported total income from operations at Rs 15688.7 crore, operating profit (EBIT)at Rs 1995.6 crore, EBIT margins was at 12.7 percent and net profit was at Rs 1,277.9 crore.

The company has announced dividend of Rs 100 per share.