Eicher misses earnings estimates as profit falls 14% in Q3
Commercial vehicles and two-wheeler maker Eicher Motors on Monday reported a bigger-than-expected decline in net profit for the third quarter ended December 31.
Escorts said consolidated net profit declined over 14% to Rs 456 crore from Rs 532 crore in the year-ago period.
Brokerage houses were expecting net profit to come in the Rs 490-530 crore range.
The company also posted lower-than-expected sales growth with consolidated revenue pegged at Rs 2,880 crore, up 1.9% over Q3 FY21. This is marginally below what analysts were expecting.
Eicher shares slipped 1% to close at Rs 2,568.55 apiece in a weak Mumbai market on Monday. The company declared its numbers after trading stopped for the day.
Other Key Highlights
1) EBITDA came at Rs 582 crore, as against expectations of over Rs 600 crore.
2) Royal Enfield sold 1,67,664 motorcycles during the quarter, a decline of 15.6% from 198,557 motorcycles sold a year earlier.
3) Its commercial vehicles joint venture VECV posted revenue of Rs 3,625.7 crore, up 35.3% from Rs 2,680 crore in the same period previous year.
4) VECV generated an EBITDA of Rs 241.6 crore versus Rs 225.5 crore; EBITDA margin shrank to 6.7% from 8.4%.
5) VECV recorded profit after tax of Rs 66 crore as compared with Rs 57.7 crore in the year ago period.
6) VECV sold 16,044 vehicles in Q3, up 25.3% from 12,805 vehicles a year ago.
Siddhartha Lal, Managing Director of Eicher Motors, said continuing global shortage of semiconductor chips and the onset of the third wave of the COVID-19 pandemic posed a challenge to the industry at large during the third quarter.
“We are working towards creating an alternative vendor ecosystem to mitigate the impact of the shortage on the supply front,” he said.
He said Eicher’s performance remains resilient despite challenges. “Our international performance has been strong, and the introduction of the all-new Classic 350 drove significant consumer interest in India and in global markets. This is reflected in our financial performance with sequential growth in EBITDA margin of 1.1% quarter-on-quarter (adjusted for one-off),” he said.
“At VECV, we made good progress across all segments backed by our focused and granular approach. We achieved encouraging growth despite supply chain challenges,” Lal added.
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