Eicher Motors Q2 net profit down 40% to Rs 343 crore

Eicher Motors on November 12 reported a 40 percent decline in consolidated net profit at Rs 343.34 crore in the second quarter ended September 30.

The company had posted a net profit of Rs 572.69 crore in the corresponding quarter last fiscal, Eicher Motors said in a regulatory filing.

Total revenue from operations during the period under review stood at Rs 2,133.60 crore as against Rs 2,192.47 crore in the same quarter a year ago, it added.

During the second quarter, the company's two-wheeler arm Royal Enfield sold 1,49,120 motorcycles, a decline of 9 percent from 1,63,390 motorcycles sold during the same period in FY 2019-20, it said.

"This quarter, we witnessed healthy demand and pick-up in business activities in the automotive industry. It has been encouraging for our motorcycle business at Royal Enfield as we have seen increased revival in consumer sentiment and demand," Eicher Motors Ltd Managing Director Siddhartha Lal said.

Stating that the company has a robust order book and booking numbers are ahead of pre-Covid levels, he said, "We are working to ensure sustainable volumes in the forthcoming quarters. We are very excited to have launched the Royal Enfield Meteor 350 earlier this month…Initial response from consumers as well as from automobile experts has been very good." In the commercial vehicles industry, Lal said the sentiments are improving with a gradual pick up in demand from certain sectors.

"At VECV (the commercial vehicles joint venture between Volvo and Eicher), we continue to remain focused on our long term objectives, including driving modernisation in commercial vehicles," he said. In the second quarter, VECV's revenue from operations dropped 13 percent to Rs 1,703 crore as against Rs 1,955 crore in Q2 of last year.

It incurred a marginal loss of Rs 7 crore during the quarter against a profit of Rs 15 crore in Q2 last year, the company said. VECV MD and CEO Vinod Aggarwal said the commercial vehicles industry continued to decline in Q2 despite quarter-on-quarter improvement. VECV MD and CEO Vinod Aggarwal said the commercial vehicles industry continued to decline in Q2 despite quarter-on-quarter improvement.

As against Q1 decline of 91 percent, decline in Q2 was much less at 46 percent against corresponding quarters of previous year. "Within the overall industry, the worst impacted is the bus segment with decline of 85 percent in Q2 and 97 percent in Q1 due to negligible demand from school and staffing segments and adverse impact on inter-city movement through public buses due to COVID," Aggarwal said.