Eicher Motors reports 62.5% YoY growth in Q3 profit on strong Royal Enfield volumes
Despite the strong performance, Eicher Motors' Q3 results were considered tepid, causing its stock to initially fall. However, the stock rebounded as investors digested the results, and Morgan Stanley pointed out a rise in the company's market share following the launch of the Royal Enfield Hunter.
Eicher Motors, the parent company of Royal Enfield, has reported a 62.5% year-on-year increase in consolidated net profit at Rs 741 crore for the third quarter of FY23. The strong result was largely due to the handsome volumes of Royal Enfield, with motorcycle volumes increasing by 31.15% at 219,898 units in Q3 FY23. VECV, the joint venture between Eicher Motors and Sweden's AB Volvo, also recorded its highest-ever third-quarter sales at 18,162 units. Royal Enfield's CEO B Govindarajan noted that the company had registered a 31% increase in wholesale and its second-highest retail for the festive season, and had recorded its highest-ever market share in the motorcycle segment at 8.1% during the quarter.
Despite the strong performance, Eicher Motors' Q3 results were considered tepid, causing its stock to initially fall. However, the stock rebounded as investors digested the results, and Morgan Stanley pointed out a rise in the company's market share following the launch of the Royal Enfield Hunter. The brokerage did note, however, that the company's margin and market share were likely to peak in 2023, with the launch of the Bajaj Triumph in 2023 and the Hero Harley in 2024 being key monitorables.
Eicher Motors' revenue growth for the quarter was also strong, with a 29.2% increase to Rs 3,721 crore. The company recently launched the Royal Enfield Super Meteor 650, which received a resounding response from consumers across the world. Royal Enfield has a close to 33% market share in the above 125cc segment, and the company's continued success in the motorcycle market is expected to drive growth for Eicher Motors.
In summary, Eicher Motors has reported strong Q3 results thanks to the impressive performance of Royal Enfield, with the company registering significant growth in wholesale and retail sales, as well as its market share in the motorcycle segment. While there are potential challenges ahead, such as the launch of competing models from Bajaj Triumph and Hero Harley, Eicher Motors is well-positioned to continue its success in the mid-size motorcycle segment.
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