Moneycontrol
Last Updated : Feb 12, 2019 08:49 AM IST | Source: Moneycontrol.com

First Cut | Weak demand mars Eicher Motors Q3 numbers

In terms of Royal Enfield's quarterly performance, it registered volume decline of 5.9 percent on a YoY basis.

Nitin Agrawal @NitinAgrawal65
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Eicher Motors Ltd (EML) posted in-line set of numbers amid concerns over volume growth due to subdued consumer sentiment.

In terms of Royal Enfield's quarterly performance, it registered volume decline of 5.9 percent on a YoY basis. The volume growth was hit due to overall weakness and subdued customer sentiments in auto sector led by rise in total cost of ownership due to mandatory long-term insurance and regulatory safety requirement. Realisation, however, witnessed a YoY increase of 10.1 percent. The company posted a YoY growth of 3.6 percent in its net revenue.

Earnings before interest, tax, depreciation and amortisation (EBITDA) margin witnessed a contraction of 221 bps, primarily, due to rise in raw material prices and negative operating leverage.

In terms of Volvo Eicher CV (VECV) performance, the company registered volume growth of 4.3 percent on YoY basis and net revenue grew 8.8 percent. EBITDA margin, however, contracted by 210 bps on the back of unfavourable product mix.

On a consolidated basis, the net revenue witnessed a YoY growth of 3.2 percent whereas EBITDA margin contracted by 214 bps.

First cut

We see limited upside in the stock price as near-term outlook continues to be weak.

For more research articles, visit our Moneycontrol Research page.

(Moneycontrol Research analysts do not hold positions in the companies discussed here)
First Published on Feb 11, 2019 03:47 pm
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