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Highlights from the Quarter (Q1FY21)

During the quarter, which was impacted by the Covid-19 pandemic and its repercussions, Eicher Motors saw its revenue decline by 65.7% YoY to Rs. 818.16 Cr. The revenue declined 62.9% on a QoQ basis from Rs. 2,208.18 Cr in the previous quarter. The dip in revenue was mainly due to decline in sales volumes, wit Royal Enfield selling 58,383 units in Q1FY21 as compared to 181,966 units in Q1FY20, a decline of 68% YoY.

The company just managed to stay EBITDA positive, bringing in Rs. 3.79 Cr for the quarter, down by more than 99% on both YoY and QoQ fronts. The EBITDA margin shrank to 0.46% against 25.80% in the corresponding quarter last year and 19.57% in the previous quarter. This was purely due to low operating leverage which led to all fixed costs increasing as a percentage of revenue. On the bottom line, the company had a net loss of Rs. 55.18 Cr for the quarter, including the Rs. 65.40 Cr loss from VECV joint venture. With the lockdown easing out, the company reported that enquiry levels are back to pre-Covid levels with booking lagging marginally.

Smaller towns and cities performed better than large cities, which suggests the studio stores are working well. The company added 38 studio stores during Q1FY21 and the total count stands at 638 stores. However, due to supply chain constraints, the company is unable to meet the growing demand with production lagging bookings by ~40- 45,000 units. On the international front, the 650 Twins continue to do well and the Interceptor 650 became the highest selling middleweight motorcycle in the UK over the last one year. VECV signed an agreement with the Volvo Group to acquire its bus business in India for a consideration of ~Rs. 100 Cr.

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