Eicher Motors Posts strong Q2FY22 numbers

News: EML reported a robust Q2FY22 performance. Consolidated sales were up 13.9% QoQ to Rs.2,250 crore flat volume growth at ~1.24 lakh units. Reported margins were up 250 bps QoQ to 20.9% with PAT was at Rs.373 crore.

Views: Results were better than expected across parameters, led by sharp 14.6% jump in Royal Enfield ASPs to Rs. 1.75 lakh/unit tracking price hikes, better product mix and higher contribution from non motorcyle revenues (spares and accessories). Margin beat was due to ~20 bps gross margin expansion vs. our estimate of 160 bps contraction. Going forward, improvement in Royal Enfield volume trajectory is the key monitorable for EML.