6 February 2020 Eicher Motors (EIM) 3QFY20 operating performance was weak, which is a reflection of volume weakness in both Royal Enfield (RE) as well as VE Commercial Vehicles (VECV). leverage) and RM costs should drag margins over the next 2-3 quarters. revenues/EBITDA/PAT grew ~1%/-13%/-6% YoY to ~INR23.7b/INR5.9b/INR5b. REs net realization grew 7% YoY (-1% QoQ) to INR129k (v/s est. Gross margins declined ~370bp YoY (-20bp QoQ) as it did not load contribution margins to pass-through of costs. This coupled with negative operating leverage resulted in EBITDA margin declining 430bp YoY (+20bp QoQ) to 25.2% (v/s est.