Eicher Motors Financial Results – Royal Enfield Sees A 13% Decline In Sales While VECV Numbers Goes Down By 9%

Eicher Motors Limited (EML) today announced its audited consolidated financial results for the quarter and year ended 31st March, 2019.

For the quarter ended March 2019, Royal Enfield’s total revenue from operations was at Rs. 2,500 crore, down 1% as compared to Rs. 2,528 crores in the same period last year; EBITDA was Rs. 685 crores, down by 14% compared to Rs 797 crores; Profit After Tax was recorded at Rs. 545 crores as compared to Rs. 462 crores in the same period last year. Royal Enfield sold 197,567 motorcycles in the quarter, registering a decline of 13% from 226,907 motorcycles sold in the same period last year.

Commenting on Royal Enfield’s performance, Siddhartha Lal, Managing Director of Eicher Motors Ltd, said, “The latter half of 2018 was a challenging period for the two-wheeler industry in India with factors such as revision in insurance cost, increase in prices on account of new safety norms, affected consumer sentiment.  At Royal Enfield, we recorded flat sales volumes after several years of augmented sales growth. Despite a challenging fourth quarter, the trend of premiumisation continues to show significant potential. This was a landmark year for Royal Enfield as our new 650 Twins - The Interceptor 650 and The Continental GT 650 - began to retail after the global launch in California, and received excellent reviews from media and consumers across the world. We believe challenges are an opportunity to introspect and better ourselves. We believe our fundamentals are robust, and we have the capabilities in place. I’m very happy to have Vinod Dasari join us as CEO, as we gear up with renewed focus on getting closer to our ambition of being a global consumer brand from India”

In the Commercial Vehicles segment, VE Commercial Vehicles (VECV) - Eicher’s joint-venture with AB Volvo - was affected by the industry slowdown especially in the later part of the year. For the quarter ended March 2019, VECV’s revenue from operations was 3% lower to Rs. 3,209 crores from Rs. 3,317 crores in the same period last year; EBITDA declined by 13% to Rs. 274 crores from Rs. 315 crores in the same period last year; Profit After Tax declined by 22% to Rs. 139 crores from Rs. 177 crores last year.

VECV sold 21,010 trucks and buses in the quarter, registering a decline of 9% over the same period last year. Given intense competition, heavy discounting and higher base from last year, VECV’s sales in the Light & Medium Duty (LMD) segment declined by 9% and 25% in the Heavy Duty (HD) segment during the quarter.

Speaking on VECV’s performance Siddhartha said “While registering a decline in the fourth quarter, VECV finished the year at par with the industry growth of 12%. The market conditions were adverse due to all-time high price discounting. In 2018-19, VECV further strengthened its product portfolio with new launches in light-duty segment with the Pro 2000 series, electric bus, an industry first 7-speed transmission and products based on new axle norms in 48 Tonnes and 55 Tonnes segments. VECV also entered Indonesia and South Africa with Kuzer under the UD brand. We continue to believe that we can be the catalyst to drive modernisation of commercial transportation in India and other developing markets.”