Bottomline would have slipped further if not for big surge in other income. The EBITDA margin decreased to 27.4% this quarter from 31.5% in the same period last year last year. VECV sold 21,010 trucks and buses in the quarter, declining 9% over the same period last year. Royal Enfield sold 197,567 motorcycles in the quarter, registering adrop of 13% from 226,907...

We re-iterate SELL as (1) Royal Enfield's 30%+ margins are behind in our view. We are building in 27.7/27.5% over FY20-21 (vs 30.1% in FY19) for RE business, (2) The demand environment remains weak even as competition (Jawa) has commenced product deliveries, (3) New frontiers product launches and foreign forays are time consuming, with returns expected with a lag and (4) Earnings growth is falling to single digit over FY19-21E . Eicher Motors 4Q APAT of Rs 5.4bn (-16% YoY, +2% QoQ), missed our estimates. The 30% EBITDA margin trajectory is behind. In our view, the new margin band is 26-29%. We are lowering estimates for FY20-21 by ~7%. Our revised SOTP is Rs18,900 (21x FY21E, earlier 22x). Re-iterate SELL.

Eicher Motors' core 2-W brand i.e. Royal Enfield (RE)'s explosive volume growth trajectory (45.8% CAGR in CY12-FY18) has tapered in recent times (0.7% YoY growth in FY19 to 8.26 lakh units). The demand scenario has been impacted by multiple headwinds ranging from increased ownership costs (insurance, finance & fuel), regulatory push related price increases, heightened competition, general postponement of consumer discretionary spending and one-offs (Kerala floods, labour strikes). With product costs only slated to go higher in coming times (BS-VI introduction) and general...

Royal Enfield's (RE) Q4FY19 result were below our and consensus estimates at operating level. EBITDA margin for the quarter stood at 27.4% which was below our and consensus estimates of 29.5% and 29.2% respectively mainly on account of higher RM cost. We maintain our cautious view on success of 650 twins in coming times and do not expect any major revival for products like Classic in near term. We estimate 918k volumes for FY20 vs company estimates of 950k for RE business and factor in CV cycle decline in our FY21 estimates. We cut our volume and revenue estimates by 2.6%/2.6% and 1.8%/1.9% for FY20/FY21E factoring slower growth for 2W. We have...

VECV's realizations increased 6.4% YoY (-8.2% QoQ) to INR1.53m. EBITDA margin came in line at 8.5% (-100bp YoY, +190 QoQ). Earnings call highlights: (a) EIM has set a production target of 950k for FY20 (implying ~15% growth on FY19 volumes of ~828k; we estimate volumes of ~848k or ~3% volume growth). (b) There has been a drop in inquiries since Diwali, but the conversion rate is intact. Its key market Kerala has seen some recovery since floods but is yet to fully normalize. (c) EIM added ~90 dealers in FY19 to ~915; targets ~1,000 dealers by endFY20. (e) The company has 42 exclusive outlets in 19 countries and plans to...

Royal Enfield volumes suffered a 10% yoy decline over Nov'18-Feb'19 despite the absence of negative one-off factors such as production losses due to labor strikes. Volume performance is expected to remain subdued due to the steep but inevitable price...

We reinstate coverage with a SELL and have a target price of Rs 21,000 based on SOTP. Multiple factors are likely to impact the growth outlook at Eicher. After witnessing robust growth over CY12-FY18, when earnings grew at 46% CAGR, we believe earnings growth will moderate to 10% CAGR over FY19-21E as lifestyle segment growth normalizes in India, competition steps in and export initiatives take time to pay off.

Growth seems to be the overwhelming concern for MPC members as global and domestic slowdown bites. It has gained a pre-eminence as inflation is well within RBI's durable target of 4%. A muted global growth bodes well for domestic inflation as oil prices should remain at current levels. Global and domestic food inflation outlook is also benign. Inflation has continued to decelerate even in Jan'19. A disappointing Q3GDP and benign Feb'19...

RE's domestic volumes declined 5% yoy in Q3, led by declines in major states such as Tamil Nadu (-37%), Kerala (-24%), Gujarat (-25%), Maharashtra (-15%), Karnataka (-9%), and Andhra Pradesh (-11%). The number of states witnessing a decline has increased...

In the quarter ended December 2018, Royal Enfield's total revenue from operations rose 3% to Rs. 2,341 crore, compared to Rs. 2,269 crores in the same period last year; Operating margin (OPM) went down by 168 bps to 29.03% and the Operating profit was Rs. 679.53 crores, down by 2% compared to Rs 696.81 crores in the same period last year. The other income went up by 57% to Rs 188.60 crore, thus the PBIDT rose by 6% to Rs 868.13 crore. The Company interest cost jumped to Rs 1.88 crore and depreciation rose to Rs 76.84 crore. Thus, the PBT grew by 5% to Rs 789.41 crore. Tax expense increased by 12% to Rs 256.46 crore and Profit After Tax grew by 2% to Rs. 532.95...

Royal Enfield's (RE) Q3FY19 revenue were above our and consensus estimates mainly on account of higher realization led by ABS implementation. EBITDA margin for the quarter stood at 29% vs our and consensus estimates of 29.8% and 30% respectively. We maintain our caution view on success of 650 twins in coming time and factor in CV cycle decline in our FY21 estimates. We cut our multiple for RE biz to 18x (earlier 21x) over slower growth in coming years and 10x for VECV business (earlier 15x) on account CV cycle downturn. We revise our TP to Rs19,860 (earlier Rs23,300) and change our...

ICICI Securities Ltd | Retail Equity Research Eicher Motors reported a subdued Q3FY19 performance Consolidated revenues for Q3FY19 were at | 2,341 crore (up 3.4% YoY). ASPs for Royal Enfield (RE) were at | 1.19 lakh/unit, up 10.4% YoY while sales volumes were at 1.94 lakh units, down 5.9% YoY. ASPs were higher due to introduction of ABS in certain models EBITDA came in at | 680 crore (down 5.4% YoY) with corresponding EBITDA margins at 29.0% (down 270 bps YoY, down 126 bps QoQ)...

Although operating margins at 29% missed PLe at 29.7%, Eicher Motors' (EIM) Q3FY19 consolidated performance was on the whole slightly ahead of our expectations. However, given that most of the high volume models (350cc variants) are now readily available and there is stagnation in demand, we don't expect RE to continue to be immune to the overall domestic motorcycle demand scenario. Given the market conditions, the slump in demand caused by the cost increase (Rs21-25K/unit) given the shift to ABS is also expected to take time to recover. Additionally, on top of it, RE for the first time would...

revenue grew 3% YoY to INR23b. Adj. PAT increased 0.4% YoY (-5.9% QoQ) to INR5.3b. EBITDA margin shrank 220bp YoY (-130bp QoQ) to 29%. For 9MFY19, revenue/EBITDA/PAT grew 13.5%/10.3%/9.4% YoY. net realization improved 5.4% QoQ (+10.1% YoY) to INR121k, led by a favorable mix and a price increase for ABS/ disc brakes.

Eicher Motors Ltd.'s profit in the September-ended quarter missed analyst expectations as costlier raw material and higher employee benefits weighed on the maker of Royal Enfield motorcycles. Eicher Motors reported 7% rise in its consolidated net profit of Rs 566.28 core for the second quarter ended Sept 2018. Consolidated revenue for the quarter grew 11% at Rs 2,408.17 crore. Barring the joint venture gain, the company registered 2% growth in profits to Rs 489.11crore....

Eicher Motors Ltd Q2FY19 results Comment Revenue decreased by 5.49% to Rs. 2395.22 Cr in Q2FY19 when compared to the previous quarter. On the other hand, it grew by 10.83% when compared with Q2FY18.

Eicher Motors reported marginal muted performance in Q2FY19. Consolidated revenues for Q2FY19 came in at | 2408 crore (up 11.3% YoY). ASP's for RE in Q2FY19 stood at | 1.14 lakh/unit, up 1.3% QoQ while sales Volumes stood at 2.1 lakh units up 3.6% YoY EBITDA came in at | 729 crore (up 5.7% YoY). The EBITDA margins stood at 30.3% (down 160 bps YoY). Disappointment on margins was primarily driven by one-time expenses related to recent launched RE 650 twin in international markets....

Royal Enfield's (RE) Q2FY19 results were below our and consensus estimates at operating level. EBITDA margin for the quarter stood at 30.3% vs our and consensus estimates of 31.8% and 31.5% respectively. EBITDA margin were majorly impacted by weaker operating leverage and higher other expenses. Revenue grew +11% YoY / -6% QoQ to Rs23.9bn driven by volume growth of +4% YoY / -7% QoQ to 210,102 units. Volumes were majorly impacted by recent strike in Oragadam plant. Net realization for the quarter increased +1.4% QoQ mainly on account of better product mix and recent price hikes. EBITDA for the quarter increased +7% YoY / -10% QoQ to at...

revenue grew 11% YoY to INR24b (in-line). Adj. PAT grew 7% YoY (- 1.7% QoQ) to INR5.6b (est. In 1HFY19, revenue/EBITDA/PAT grew 19%/18%/14%, implying residual growth of 12%/15%/14% for 2H. net realization improved 1.3% QoQ (+7.3% YoY) to INR114.4k (est. of INR113.2k), led by favourable mix.

Eicher Motors' (EIM) Q2FY19 consolidated performance was broadly in-line Change in Estimates | Target | Reco (350cc variants) are now readily available and there is stagnation in demand,...