Eicher Motors Q2FY22: Consolidated profit jumps 9% amid growth in CV segment

Eicher Motors Ltd (EML) on Wednesday reported a 9 per cent rise in consolidated profit at Rs 373.2 crore for September quarter 2021-22 boosted by growth in commercial vehicles segment amid semiconductor shortage affecting sales of Royal Enfield motorcycles.

The company had posted a consolidated profit after tax of Rs 343.34 crore in the same quarter last fiscal year, EML said in a regulatory filing.

Total revenue from operations during the quarter stood at Rs 2,249.56 crore as against Rs 2,133.6 crore in the year-ago period.

During the second quarter, group firm two-wheeler maker Royal Enfield sold 1,23,515 motorcycles, a decline of 17.2 per cent from 1,49,120 motorcycles sold over the same period in 2020-21, it said.

VE Commercial Vehicles (VECV)-- the company's joint venture with Volvo -- recorded an overall sales volume of 15,134 units in the second quarter against 8,167 units in the same period last year, a growth of 85 per cent, it added.

"The second quarter of FY 2022 saw a remarkable performance by Royal Enfield in international markets with a growth of more than 130 per cent over the corresponding period last year. Our consistent growth in volumes and global retail presence is testament to the company being on track to realise its vision of becoming the first premium global consumer brand from India," EML Managing Director Siddhartha Lal said.

At VECV, he said, "We continued to deliver on our sustained growth momentum backed by a robust recovery in HD (heavy duty), LMD (light and medium-duty), and bus segments. Overall, with the market picking up over the festive season, consumer sentiment significantly improving over the year, we see that demand continues to be strong and outstripping supply."

Lal further said, "With the semiconductor and supply chain issue expected to ease off over the next quarter, we are optimistic and poised for growth."

Royal Enfield Executive Director B Govindarajan said this quarter was impacted by the ongoing global shortage of semiconductor chips but the company remained engaged with its suppliers to mitigate the situation and maximise supplies.

"Moving forward, we foresee the supply chain situation improving gradually and expect the availability of parts to increase beginning Q3-FY22 which will enable us to further ramp up production," he added.

In the second quarter, VECV posted a profit after tax of Rs 18 crore. It had registered a loss of Rs 7.2 crore in the corresponding period last year, EML said, adding VECV's revenue from operations was Rs 3,153 crore, up 80 per cent from the year-ago period.

VECV Managing Director and CEO Vinod Aggarwal said with a focused approach, the company was able to achieve a growth of 85 per cent in volumes in the second quarter despite challenges on the supply side.

"CV industry is likely to grow based on pent-up replacement demand as well as the demand of construction and infrastructure-related trucks. With a strong product portfolio and focus on retail excellence, we are in a good position to continue our growth path," he added.

Last quarter, the company had launched the new high-end premium Volvo heavy-duty trucks suitable for rigorous mining, construction, and long-haul applications that are designed to deliver higher operational efficiency increasing productivity and profitability for the customers, Aggarwal added.