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Last Updated : Nov 12, 2018 09:25 AM IST | Source: Moneycontrol.com

Eicher Motors likely to report healthy Q2 numbers on improved Royal Enfield sales

Brokerages also expect good profits from associates to boost its financials.

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Q11. Madras Motors first imported the Royal Enfields to India in 1953 when it received a big order. Who placed the order?
Q11. Madras Motors first imported the Royal Enfields to India in 1953 when it received a big order. Who placed the order?
 
 
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Eicher Motors, which reports its September quarter results on November 12, is likely to report a good September quarter on the back of steady Royal Enfield sales.

Brokerages also expect good profits from associates to boost its financials.

Here’s a gist of what different brokerages are expecting from is results.

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Brokerage: Kotak Institutional Equities | PAT: Rs 646.4 crore

The brokerage expects Royal Enfield volumes to rise 3.6% YoY in the September quarter. The standalone revenues could grow 14% YoY led by an increase in prices as the company introduced disc brakes instead of drum brakes in the rear wheel.

However, it expects Royal Enfield's operating margin to decline by 35 bps YoY.

The consolidated net profit could increase by 25% YoY led by strong performance of both RE and VECV (driven by strong growth in domestic CV volumes) and a lower effective tax rate.

Brokerage: Axis Securities | PAT: Rs 590 crore

Axis Securities expects revenue growth to be driven by volumes at Royal Enfield along with higher YoY realizations. The margin could contract due to higher staff and other expenditure (higher marketing costs).

Brokerage: Emkay | PAT: Rs 569.7 crore

Emkay expects the consolidated revenue to grow by 10% YoY (-6% QoQ) to Rs 2,390 crore led by 4% YoY (-7% QoQ) growth in motorcycle volume.

Overall, adjusted PAT is likely to increase by 10% YoY (-1% QoQ) to Rs 570 crore supported by increase in share of profits from associates.

Brokerage: ICICI Securities | PAT: Rs 589 crore

Eicher Motors is expected to report a stable performance in Q2FY19. Royal Enfield (2W) sales volume in Q2FY19 was at 2.1 lakh units, up 3.6% YoY amid supply disruption at one of its key facilities (volume lost of 10,000 units). CV sales at the VECV business segment were at 18,940 up 24% YoY.

Consolidated PAT also includes profit from JV, which is expected at Rs 73.1 crore.

Brokerage: Motilal Oswal | PAT: Rs 620 crore

Royal Enfield’s volumes grew by 22.5% YoY (-0.7% QoQ) to 225,361 units, aided by additional capacity amid healthy demand.

Net realization is expected to improve by 2.8% YoY (+0.3% QoQ), supported by price hikes and mix.

The EBITDA margin may expand 30 bps YoY to 31.7% (-60bp QoQ).

Consolidated revenue would increase 25.8% YoY (-0.4% QoQ) to Rs 2,520 crore. Consolidated margin is likely to be 31.7%.

Key issues to watch

Outlook on RE demand and order book.

Update on timeline for new launches.

Update on current demand trends for commercial vehicles and discount levels.

Update on capacity addition for RE & VECV.

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First Published on Nov 12, 2018 09:25 am
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