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Eicher Motors: Reports steady performance in Q2FY25; Guides healthy performance for H2FY25
On the consolidated basis, total operating income for the quarter came in at ₹4,263 crore (up 4% YoY) amid flattish Royal Enfield sales volume at 2.27 lakh units. EBITDA in Q2FY25 came in at ₹1,088 crore with corresponding EBITDA margins at 25.5% (down 101bps QoQ).
Share of profits from the VECV arm stood at ₹114 crore with EBITDA margins at 7.1% (down 50bps QoQ). Resultant PAT for the quarter stood at ₹1,100 crore (up 8.3% YoY).
Recent successful launches like Guerilla 450, Bear 650, Classic 650 and newly introduced electric vehicle brand, Flying Flea with models like the Classic-styled Flying Flea C6 and Scrambler-styled Flying Flea S6, are expected to drive revenue growth and margin appreciation going forward.
We maintain a positive outlook on the company, expecting it to deliver double digit returns in medium to long term. Capital efficient business model and cash rich B/S remain structural strengths for the company.
EIM expects strong growth in the second half of FY25. It is optimistic about a rebound in commercial vehicle demand, driven by government infrastructure investments and continued momentum in Royal Enfield sales, particularly with new product introductions and festive-season demand.
Our last rating on the company was BUY with a target price of ₹ 5,750, on SoTP basis (30x PE to RE business & 25x PE to VECV arm- FY26E).
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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