Royal Enfield and commercial vehicle maker on May 27 clocked a healthy 72.9 percent year-on-year growth in consolidated profit at Rs 526.14 crore for the quarter ended March 2021, driven by strong volume and operating performance.
Consolidated revenue from operations grew by 33.2 percent year-on-year to Rs 2,940.33 crore in Q4FY21, the company said in its BSE filing.
Royal Enfield sold 2,03,343 motorcycles in the quarter, an increase of 25 percent from 1,63,083 motorcycles sold over the same period in FY20. VECV volumes have also grown around 66 percent YoY to 19,300 units.
The operating performance was strong for the quarter with EBITDA (earnings before interest, tax, depreciation and amortisation) growing 46.8 percent year-on-year to Rs 634.39 crore and margin improving 200 bps to 21.57 percent.
The stock was trading at Rs 2,701.05, up Rs 95.75, or 3.68 percent. It has touched an intraday high of Rs 2,709.20 and an intraday low of Rs 2,621.
On a standalone basis, the profit grew by 35.2 percent to Rs 468.08 crore in Q4FY21 compared to the year-ago quarter, and revenue in the same period at Rs 2,922.44 crore increased by 34.1 percent YoY.
Here is what brokerages have to say about the stock and the company after the March quarter earnings announcement:
CLSA | Rating: Underperform | Target: Rs 2,600
The company outperformed its peers on volumes in Q4 after two years. Its outperformance may continue in FY22. Valuation premium leaves little upside potential. The brokerage house has raised FY22-23 EPS forecasts by 2 percent.
Jefferies| Rating: Buy | Target: Rs 3,250
The research firm has cut FY22/FY23 EPS estimates by 13 percent/3 percent. It is of the view that Q4 EBITDA and profit fell 1-6 percent QoQ but are in line with estimates. The company's RE EBITDA/Vehicle was flattish QoQ despite rising metal costs adding that RE reiterates about strong product pipeline for FY22.
Morgan Stanley | Rating: Overweight | Target: Rs 3,198
The research firm is of the view that adjusted EBITDA of Rs 670 crore was a tad higher than estimates. The company's order book remains strong. Its potential benefits of digitisation and value engineering keep us overweight, it brokerage firm added.
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