Eicher Motors Q1 results: Profit rises 20% to Rs 1,101 cr on strong sales

Eicher Motors , which makes the Royal Enfield line of motorcycles, reported a bigger-than-expected first-quarter profit on Thursday, helped by strong sales of higher-margin models such as the Himalayan 450.

The company's profit rose almost 20 per cent year-on-year to Rs 1,101 crore ($131.2 million) in the April-June quarter, beating analysts' average estimate of Rs 1,014 crore, as per LSEG data.

Eicher clocked record-high sales in the previous two fiscal years due to strong demand from urban consumers, its key demographic. But demand has begun to peter off due to various factors, including rising competition and persistently high inflation.

Still, domestic sales of Royal Enfield's models with an engine capacity of more than 350cc, such as the Interceptor 650, jumped 29 per cent in the quarter, according to previously released monthly data.

 

These higher-margin motorcycles accounted for roughly 14 per cent of sales, up from 11.1 per cent last year.

That helped counter the roughly 4 per cent drop in domestic sales of the company's sub-350cc models, such as the Hunter 350, which accounted for roughly 85 per cent of overall sales.

Overall revenue from operations, which includes sales of commercial vehicles such as trucks, rose more than 10 per cent to Rs 4,393 crore, topping analysts' estimate of Rs 4,238 crore.

Royal Enfields are the market leader among India's premium motorcycles, but its lead is being eaten into by Triumph, which has partnered with Bajaj Auto in India, as well as Harley Davidson, whose local partner is the country's No.1 two-wheeler company, Hero MotoCorp.

Bajaj Auto also beat profit estimates for the quarter, also helped by sales of higher-margin vehicles. Hero MotoCorp is due to report results next week.