Eicher Motors Q3 earnings disappointing

Eicher Motors Q3 earnings disappointing

Shares of Eicher Motors slipped nearly 1% on Thursday, a day after the two-wheeler and commercial vehicle maker reported lower-than-expected earnings for the quarter ended December 2020.
Consolidated profit rose 6.8% year-on-year (YoY) to Rs 532.6 crore in Q3 FY21 supported by Royal Enfield segment but hit by higher input cost. Consolidated revenue from operations grew by 19.3% YoY to Rs 2,828.3 crore in Q3 FY21, driven by higher volumes.

Eicher Motors recorded a 9% YoY growth in Royal Enfield’s volumes to over 1.99 lakh units and around 3% growth in VECV volumes to 12,800 units in Q3 FY21.
Experts believe that Eicher Motors current valuation is premium (51-62% over Hero MotoCorp and Bajaj Auto), which is unsustainable, but the recently launched Meteor and upcoming products would help the Royal Enfield maker to expand addressable markets and drive the next phase of growth.
Meanwhile, the company does not expect the price hike to fully offset rising commodity pressures in Q4.

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