Eicher Motors Q1 Preview: Flat volumes to limit revenue growth, hurt by slow sales of Hunter Enfield bike

The Eicher Motors stock has slipped over 7 percent in the last week.

Eicher Motors is set to release its earnings report for the first fiscal quarter of FY25 on August 8. Flat volume growth and slow sales of its popular Hunter Enfield bikes are likely to limit the company's revenue and in turn, profit, growth to single digits.

According to a Moneycontrol poll of seven brokerage firms, New Delhi-headquartered Eicher Motors is anticipated to record a 8 percent year-on-year increase in revenue, reaching Rs 4,263 crore. Net profit is projected to rise 8.4 percent to Rs 991 crore from Rs 914 crore in the same quarter of the previous fiscal year..

Earnings estimates from analysts polled by Moneycontrol are in a narrow range, indicating that any positive or negative surprises could trigger a sharp reaction in the stock price.

What factors are hurting Eicher Motors' earnings?

Flat volumes: Analysts suggest that total revenue will only increase by about 8 percent on account of flattish volumes. Though, the impact would be partly offset by an increase in average selling price (ASPs) due to price increases taken in the last one year.

VECV, export decline: Eicher's export mix will also likely decrease by 80 basis points quarter-over-quarter. While VECV (Volvo Eicher Commercial Vehicles) volumes have increased by 1.5 percent year-over-year, they have dropped by 23 percent sequentially.

"We estimate standalone EBITDA margin to decline by 40 bps QoQ in the first quarter led by inferior product mix and commodity headwinds partly offset by lower ad spending," Kotak Institutional Equities said in a note.

What to look out for in the quarterly show?

Guidance on demand, raw material costs and outlook for the VECV segment are key things to watch out for during the quarter.

Eicher Motors shares ended at Rs 4,597, lower by 1.2 percent from the last close. The Eicher Motors stock has slipped over 7 percent in the last week.

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