Eicher Motor

The company’s numbers for Q1CY13 was a reflection of the state of the automobile sector. Recognised as the ‘Royal Enfield’ company, it also has a JV with Volvo group, VE Commercial Vehicles (VECV), which designs, manufactures and markets engineering components and provides engineering design solutions. It posted a 11% (YoY) decline in consolidated net profit at Rs.98 crore and this was on a meager 3% growth in net sales at Rs.1709 crore. The stock hit a new high yesterday and was the top gainer on the BSE due to two factors – firstly, VECV stated that its market share, YoY, had risen from 11.1% to 13.9%. Secondly, by keeping a tight lid on costs, it posted its best ever OPM at 15.9%.

Its new facility at Oragadam plant starts with an installed production capacity of 1.50 lakh units in the first phase. An initial investment of Rs 150 crore has been made towards construction of this facility that will produce the full range of Royal Enfield motorcycles. With this, the company ‘s capacity in 2013 stands at 1,75,000 motorcylces from both the plants thus being able to scale up production to meet market demand. Work on the second phase of expansion at Oragadam has begun and this is expected to increase its capacity to 2,50,000 motorcycles by 2014. Its new line of Royal Enfield, Bullet 500 has been launched in Feb and another, Continental GT will be launched some time in 2013.