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Here’s what to expect from Eicher Motors' Q2 results

Eicher Motors will report its second-quarter results on Monday and the street is expecting a low double-digit topline growth this time around.

By Sonia Shenoy Nov 12, 2018 12:43:33 PM IST (Updated)

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Eicher Motors will report its second-quarter results on Monday and the street is expecting a low double-digit topline growth this time around.

Shares of Eicher Motors have fallen almost 25 percent this year. The key reason for that is the Royal Enfield growth has slowed down considerably compared to what we have seen in the last few quarters.

The main reasons for weak Royal Enfield growth was 1) the impact of Kerala floods 2) there was a strike at Oragadam plant which impacted production this time and 3) in general sentiment has been low for luxury bikes.

So all of that put together has caused 3 percent volume growth for Royal Enfield in this quarter compared to 20 percent plus growth that it has seen over the last few quarters. That will result in a double-digit growth but a low double-digit, so a 12 percent revenue growth is what we are looking at.

We are expecting about Rs 2,420 crore odd. The margins will in fact fall to about 30.9 percent versus 31.5 percent. Even in the last quarter we saw an increase in other expenses because of some launch cost that they had on account of new models – that may trickle into this quarter as well and hence we are expecting margins to fall. However, the net realizations could rise by 6 percent year-on-year because of an improved product mix and a price hike that the company undertook.

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