Eicher Motors reports consolidated net profit of ₹237 cr in Q1

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Vinod Dasari, Royal Enfield CEO, is stepping down with effect from August 13

Eicher Motors on Thursday reported a consolidated profit after tax of ₹237 crore for the quarter ended June, riding on improved sales.

The company had witnessed a loss of ₹55 crore in the April-June period of 2020-21.

Total revenue from operations rose to ₹1,974 crore from ₹818 crore in the corresponding quarter of FY 2020-21.

Royal Enfield, a part of Eicher Motors, reported sales of 1,22,170 motorcycles in the first quarter, an over two-fold increase from 58,383 units sold in Q1 of last fiscal.

The company also said Vinod Dasari, Royal Enfield CEO, is stepping down with effect from August 13. The company has appointed B Govindarajan as executive director to head the Royal Enfield business.

Commenting on the Q1 performance, Eicher Motors Managing Director Siddhartha Lal said with the second wave of the pandemic sweeping across the country and making its impact felt through the economic cycle, the previous quarter presented a challenging environment for the automotive sector overall. “However, we continue to believe in our strong business fundamentals and are positive about the long-term prospects and performance of both Royal Enfield and VECV. Despite the unprecedented situation, we stayed resilient and delivered the strongest ever quarter for Royal Enfield in international markets,” he noted.

In the domestic market, the company’s bookings saw an uptick in the month of June as local lockdowns and restrictions were gradually lifted across the country, Lal said.

The global shortage of semiconductors continues to be a concern, and is likely to hamper production for the ongoing quarter, and possibly through the rest of the year as well, he added. “While the economy continues to recover, we remain optimistic and committed to our strategic focus areas moving forward,” Lal stated.

In a virtual press meet, he noted that new product launches have been delayed due to production challenges. However, Lal said the situation is expected to become relatively better during the second half of the fiscal.

To a query related to capital expenditure for enhancing production capacities, he said, “We had a capex of around ₹500 crore last year, we are expecting to do similar kind this year as well.” Royal Enfield has already undertaken price hikes in June and July to offset some of the impact of increase in commodity prices, Lal said in answer to another question.

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