Eicher Motors Q2FY23 Preview| Revenue likely to grow up to 61% YoY, profit may jump 94% on low base and price hikes

The Super Meteor 650 is the solo tourer variant and will be available in five colourways - Astral Black, Astral Blue, Astral Green, Interstellar Grey and Interstellar Green. The Super Meteor 650 Tourer is the grand tourer variant and will be available in two colourways - Celestial Red and Celestial Blue. (Image: Royal Enfield)

Two-wheeler major Eicher Motors is expected to see another quarter of stellar year-on-year growth in revenue and profit, led by low base, easing supply problems, fall in raw material prices and price hikes.

Taking the estimates made by eight brokerages, on a consolidated basis, revenue is expected to grow between 57 percent and 61 percent year-on-year (YoY) and net profit between 83 percent and 94 percent. Revenue estimates range from Rs 3,532.5 crore to Rs 3,618 crore, and net profit estimates start from Rs 627 crore to Rs 701 crore. Ebitda margin is forecasted to grow by 540bps to 24.5 percent.

Also read: Eicher's Royal Enfield rejigs product strategy in its hunt for growth

On a standalone basis, revenue is expected to grow between 56 percent and 62 percent YoY and net profit to grow between 83 percent and 88 percent. Standalone revenue estimates range from Rs 3,436 crore to Rs 3,530 crore, and net profit estimates range from Rs 627 crore to Rs 647 crore.

In Q2FY22 Eicher posted a consolidated revenue of Rs 2,250 crore and net profit of Rs 373.2 crore. Ebitda margin was 20.9 percent.

Sequentially, consolidated revenue is expected to go up by 4-6.5 percent, and net profit may go up by 3-14.8 percent. Standalone revenue is expected to grow by 6-9 percent, and net profit to grow by 8-11.6 percent during the period under review. Ebitda margin growth is expected to be flattish.

In Q1FY23 the company posted a consolidated revenue of Rs 3,397 crore and net profit of Rs 610.66 crore. Ebitda margin was 24.5 percent.

According to analysts at Kotak Institutional Equities, standalone numbers will be a mixed bag, with growth in domestic volumes and fall in exports, and rise in volumes but fall in average selling price (ASPs).

Also read: Which are the top five two-wheelers set to hit the road this month?

In their Q2FY23 earnings preview note, the analysts wrote, “Royal Enfield volumes increased by 11% qoq in 2QFY23 led by (1) 16% qoq growth in domestic segment led by launch of new Hunter 350 and (2) 16% qoq decline in export segment owing to slowdown in EU region amidst rising inflation. We expect revenues to increase by 6% qoq in 2QFY23 led by (1) 11% qoq increase in volumes and (2) 6% qoq decline in ASPs due to higher mix of Hunter 350 and lower mix of export segment (higher cc motocycle sales in export geographies)”.

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