In terms of Royal Enfield's quarterly performance, it registered volume decline of 5.9 percent on a YoY basis.
Eicher Motors Ltd (EML) posted in-line set of numbers amid concerns over volume growth due to subdued consumer sentiment.
In terms of Royal Enfield's quarterly performance, it registered volume decline of 5.9 percent on a YoY basis. The volume growth was hit due to overall weakness and subdued customer sentiments in auto sector led by rise in total cost of ownership due to mandatory long-term insurance and regulatory safety requirement. Realisation also witnessed a YoY decline of 1.5 percent. The company posted a YoY growth of 11 percent in its net revenue.
Earnings before interest, tax, depreciation and amortisation (EBITDA) margin witnessed a contraction of 280 bps, primarily, due to rise in raw material prices and negative operating leverage.
In terms of Volvo Eicher CV (VECV) performance, the company registered volume growth of 4.3 percent on YoY basis and net revenue grew 8.8 percent. EBITDA margin, however, contracted by 210 bps on the back of unfavourable product mix.
On a consolidated basis, the net revenue witnessed a YoY growth of 3.2 percent whereas EBITDA margin contracted by 214 bps.
We see limited upside in the stock price as near-term outlook continues to be weak.
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(Moneycontrol Research analysts do not hold positions in the companies discussed here)
