InvestorQ : How did Eicher Motors dip into net losses in the Jun-20 quarter?
Rashi Mehra made post

How did Eicher Motors dip into net losses in the Jun-20 quarter?

Answer
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Archita Jajjoo answered.
1 month ago


It is hard to recollect when was the last time that Eicher had posted a net loss in any quarter, but that has happened. Eicher Motors posted net loss of Rs.55.20 crore for the Jun-20 quarter which was bad, although not as bad as consensus estimates.

In the Jun-19 quarter, Eicher had reported a profit of Rs.452 crore. For the Jun-20 quarter, Eicher reported 66% lower revenues at Rs.818 crore. Due to the prolonged lockdown, volumes fell sharply despite signs of good demand recovery towards end of the quarter.

Royal Enfield, the motorcycle division sold 68% fewer motorcycles in the quarter at 58,383 during the Jun-20 quarter. On the other hand, the VECV segment registered 84% fall in sales at just 2129 units. The VECV segment reported a loss of Rs 120 crore.

For the Jun-20 quarter, EBITDA dropped 99.4% at Rs.3.80 crore while the EBITDA margins fell vertically from 25.8% to 0.50%. The margin figures were much lower than the street estimates. Eicher Motors has fixed August 25 as the record date for its 10-for-1 stock split.