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News: Consolidated revenues for Q3FY23 stood at Rs 3,721 crore up 5.7% QoQ. EBITDA for the quarter stood at Rs 857 crore with attendant EBITDA margins placed at 23%, down 30 bps QoQ. Consequent consolidated PAT stood at Rs 741 crore, up 12.8% QoQ. PAT performance for the quarter was also supported by higher than expected other income.
Views: For Q3FY23, ASP’s at Royal Enfield (despite adverse product mix) & profitability on VECV front surprised positively whereas margin performance lagged peers wherein company witnessed ~64 bps QoQ gross margin depletion. Management commentary suggests some raw material decline benefits along with price hike to come in effect from Q4FY23 onwards amid robust demand for its product profile and near zero product cannibalization post Hunter 350 launch. Further management also informed about setting up CKD units in Nepal & Bangladesh to strengthen its export market aided by continuing brand building exercise.
Impact: Neutral