Eicher Motors Q4 Preview: Net profit may rise 20% on strong operating leverage

Eicher Motors' stock price has gained 11 percent since the beginning of the year.

New Delhi-headquartered Eicher Motors Limited is set to release its earnings report for the fourth fiscal quarter of FY25 on May 14. Analysts expect a solid pickup in revenue on strong volumes and price hikes undertaken by the company. However, margins are expected to dip due to an inferior product mix and ad spending.

According to a Moneycontrol poll of eight brokerage firms, the Royal Enfield-maker is anticipated to record a 21 percent year-on-year increase in revenue, reaching Rs 5,072 crore. Net profit is projected to surge 20.6 percent to Rs 1,186 crore from Rs 983 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 could drive Eicher Motors' earnings?

Strong volumes: The company registered a 24 percent increase in volumes to 2.82 lakh vehicles, compared with 2.27 lakh units sold in the same quarter of the previous year. This, coupled with a rich mix, could likely lead to solid revenue growth.

EBITDA contraction: The EBITDA margin is expected to decline by 210 basis points year-on-year due to higher marketing expenses and an unfavourable product mix. However, margins may improve by about 80 basis points sequentially, supported by operating leverage benefits.

Price hikes, operating leverage to support Q4: Either Motor’s earnings are expected to see support from the price increases taken over the past year, which have helped improve realisations and offset some of the cost pressures. Additionally, better operating leverage—driven by higher production efficiency and scale—should aid overall profitability.

What to look out for in the quarterly show?

Investors will be keen to understand retail demand trends and the impact of recent marketing and activation efforts on sales performance. Commentary on current inventory levels and the outlook for international markets will also be closely tracked. Guidance on FY26 production plans, along with management’s view on commodity cost headwinds or tailwinds during the quarter, will be important. Additionally, the market will look for updates on upcoming model launches and any planned price hikes.

Shares of the company ended at Rs 5,424, lower by 1.74 percent from the last close, on the NSE on May 13. Eicher Motors' stock price has gained 11 percent since the beginning of the year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.