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Eicher Motors: Reports stable performance in Q1FY25, guides for pick in volumes in 9MFY25
- On the consolidated basis, Total operating income for the quarter came in at ₹4,393 crore (up 10% YoY) amid flattish Royal Enfield sales volume at 2.26 lakh units.
- EBITDA in Q1FY25 came in at ₹1,165 crore with corresponding EBITDA margins at 26.5% (flat QoQ). Resultant PAT for the quarter stood at ₹1,102 crore (up 20% YoY).
- Share of profits from the VECV arm stood at ₹175 crore for the quarter (includes tax credit as well). EBITDA margins at VECV arm came in at 7.7% (down 10 QoQ).
- Margin performance on the standalone basis (Royal Enfield franchise) was satisfactory at 27.9% (up 30 bps QoQ) amidst ~50 bps expansion in gross margin profile. Margins for the quarter were supported by benign commodity prices as well as better product mix with share of >350cc segment increasing from 11% in Q1FY24 to 14% in Q1FY25.
- Management expects mid-weight premium motorcycle segment to grow high single digit in FY25E. Moreover, the recent successful launches like Guerilla 450, Himalayan 450 & Shotgun 650, are expected to drive revenue growth and margin appreciation in the coming quarters.
- With the rebasing of margins and healthy growth prospects, valuations are reasonable at Eicher Motors at 2-year forward PE of ~25x vs. its long period average of ~30x. Consequently, we maintain a positive outlook on the company
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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