InvestorQ : How were the quarterly numbers of Eicher Motors in the Sep-20 quarter?
diksha shah made post

How were the quarterly numbers of Eicher Motors in the Sep-20 quarter?

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Rashi Mehra answered.
3 weeks ago
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In a quarter when auto companies have not had the best of times, Eicher was no exception. It had a tough quarter with net profits down 40% on a yoy basis at Rs.343 crore. It was a sharp fall in profits and largely it was on account of weak demand off-take.

There was a sales decline in both its major business lines. The pandemic created demand constraints in its two-wheeler business as well as its commercial vehicles joint venture with Volvo of Sweden, which makes over 3.5 ton vehicles for the Indian market.

The revenue impact was not too material, at least, indicating that the worst of the lockdown may be over and things are returning to pre-COVID levels. Overall revenues were only down 3% at Rs.2134 crore in the Sep-20 quarter, which is close to pre-COVID numbers.

While the profits did get impacted in the case of Eicher, it must be remembered that both the top line and the bottom line reported by Eicher were well above the street expectations. That should be price positive for the stock and traders must play accordingly.

If you look at the motorcycles business, volumes fell by 9% to 149,120 units. While it made a profit on two-wheelers, Eicher incurred a small loss of Rs.4 crore on its CV joint venture with Volvo. Construction, mining, agri and ecommerce have been driving demand revival.

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