BENGALURU (Reuters) – India’s Eicher Motors, the maker of Royal Enfield motorcycles, posted a bigger-than-expected 48% jump in fourth-quarter profit on Thursday, helped by higher sales as demand for two-wheelers picked up.
The company’s consolidated net profit rose to 9.06 billion rupees ($111 million) in the quarter ended March 31, from 6.10 billion rupees a year earlier.
Analysts, on average, had expected a profit of 7.96 billion rupees, according to Refinitiv data.
Since the start of the pandemic, the auto industry has grappled with a surge in raw material prices and supply chain disruptions.
However, supply chain constraints have improved in recent quarters with the withdrawal of COVID restrictions and input costs have cooled. With softening of inflationary pressure, demand for two-wheelers has also increased.
“We saw overall stabilization of supply chain, markets, and also the organization,” said Siddhartha Lal, managing director.
Sales of Royal Enfield, which generates most of Eicher’s revenue, jumped 17.9% to 214,685 units in the quarter.
The company’s commercial vehicle segment, a joint venture with Sweden’s AB Volvo, logged a 31.3% rise in total sales. The segment includes Eicher-branded trucks and buses, Volvo trucks, and aftermarket support for Volvo buses in India.
Total revenue from operations rose 19.1% to 38.04 billion rupees in the quarter, helped by higher motorcycle sales. Total expenses rose 18.3% due to slightly higher input costs.
Eicher also approved a cash outlay towards capex of 10 billion rupees for the financial year 2023-24, which includes investment towards an electric vehicle manufacturing facility and new product development under the internal combustion engine portfolio, it said in a statement.
The company’s peers TVS Motors Co Ltd, and Hero MotoCorp Ltd also beat profit estimates, boosted by demand surge, while Bajaj Auto Ltd reported a drop due to sluggish exports.
Shares of the company closed down 0.3% ahead of results.
($1 = 81.7800 Indian rupees)
(Reporting by Anuran Sadhu in Bengaluru; editing by Eileen Soreng)
