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Eicher Motors expects hit on Q1 profits due to COVID-19 lockdown

In a regulatory filing disclosing the impact of COVID-19 on its overall operations, the company however said it has adequate financial resources to run its operations smoothly, while it has successfully cleared all existing inventory of BS-IV motorcycles across channels and dealerships as on March 20, 2020.

July 29, 2020 / 10:28 PM IST
 
 
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Eicher Motors on Wednesday said its profitability for the first quarter of 2020-21 will be impacted due to the country-wide lockdown following the coronavirus pandemic.

In a regulatory filing disclosing the impact of COVID-19 on its overall operations, the company however said it has adequate financial resources to run its operations smoothly, while it has successfully cleared all existing inventory of BS-IV motorcycles across channels and dealerships as on March 20, 2020.

"In the months of April 2020, May 2020 and June 2020, the company could sell only 91 units, 19,113 units and 38,065 units, respectively. The definitive impact on Q1 2020-21 profitability and revenue will be announced post consideration and approval of Q1 2020-21 financial results by the board," Eicher Motors said.

Following the new directives issued by the government on May 1 with regard to resumption of manufacturing, industrial and commercial business activities, Royal Enfield has resumed operations at its manufacturing facilities starting May 6, 2020.

As on date, all the three manufacturing facilities of the company are operational, it added.

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On the estimation of the future impact of the health crisis the company said it has been closely monitoring the situation arising out of COVID-19 and is "forecasting balanced revival in demand of its motorcycles".

The company said it is "optimistic about revival in demand for its motorcyles and this is witnessed from the June 2020 month sales numbers. Demand for the company's motorcycle is expected to recover further in the forthcoming quarters of the financial year 2020-21".

"However, it is difficult to forecast definitive future impact on operations of the company," Eicher Motors said.

The supply chain of the company was affected due to lockdown of operations during April 2020 and May 2020. With the ease in restrictions and staggered resumption of the operations, the supply chain is getting restored, it added.
PTI
first published: Jul 29, 2020 10:27 pm

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