Eicher Motors Q3 Results Preview: Royal Enfield maker likely to stage a strong show with 31% jump in profit, 300 bps margin expansion

Eicher Motors, the parent company of motorcycle maker Royal Enfield, is all set to report its financial results for the October-December period (Q3 FY24) on Tuesday, February 13. Analysts expect the auto major to stage a strong financial performance amid improving operating leverage on the back of easing input costs, and growth in volumes as well as realisations in its subsidiary, Royal Enfield.

According to Zee Business research, Eicher Motors is estimated to report a consolidated net profit of Rs 970 crore for the quarter ended December 31, 2023, translating into an increase of 30.9 per cent compared with the corresponding period a year ago. The analysts expect its revenue for the fiscal third quarter to increase 8.8 per cent on a year-on-year basis to Rs 4,050 crore.

Eicher Motors is estimated to register third-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) of Rs 1,055 crore, up 23.1 per cent compared with the year-ago period, according to the research.

Zee Business analysts peg Eicher Motors’ margin, a key measure of profitability, to improve by 300 basis points (bps) to 26 per cent.

What to expect in Royal Enfield

According to Zee Business research, Royal Enfield volumes are estimated to increase 3.0 per cent on a year-on-year basis to 2.28 lakh units, with 6.0 per cent growth in domestic sales as well as realisations to Rs 1,72,000 per unit.

Analysts will track Eicher Motors’ results closely for details on upcoming launches, demand outlook on the export market, and bookings of the recently launched Himalayan 500.

How Eicher Motors fared in the July-September period (Q2 FY24)

In November, Eicher Motors staged a strong financial performance for the fiscal second quarter.

Its consolidated net profit jumped 1.5 times on a year-on-year basis to a record Rs 1,016 crore with growth of 16.9 per cent in revenue to a record Rs 4,115 crore for the July-September period, according to a regulatory filing.

The company’s second-quarter margin improved by 310 basis points to 26.4 per cent compared with the year-ago period.

Zee Business analysts had pegged Eicher Motors’ second-quarter  net profit at Rs 930 crore, revenue at Rs 4,050 crore, and margin at 25.7 per cent.

Eicher Motors shares: Past performance

As of February 12, Eicher Motors shares have grown 19 per cent in the past year, as against gains of 22 per cent and 48 per cent in the Nifty50 and Nifty Auto indices respectively.

The auto major’s stock strengthened 19.9 per cent in the fiscal third quarter while the 50-scrip benchmark index rose 10.7 per cent and the auto gauge gained 15 per cent.

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