Eicher Motor

The company has posted a good set of numbers for Q1FY14, much ahead of most estimates. Its two-wheeler sales, mainly Royal Enfield, remains its biggest grosser, helping get over the slowdown in its commercial vehicle sales. Standalone net revenue rose 50% (YoY) at Rs.255 crore, led by a 45% volume growth. EBITDA margin at 17.8% was up 250 bps. On a consolidated basis, which includes its JV with Volvo, revenue rose 5.4% (YoY) at Rs.1669 crore. EBITDA was up 19% at Rs.166 crore and margins rose 120 bps at 10%. The company ended the quarter with a net profit at Rs.125 crore, up 12%. Though the outlook for CVs remains muted, the company hopes to led growth through its two-wheelers. It has lined up a new launch – Continental GT for September’13 and the company hopes that will help boost its earnings, given the harvest and season taking off during that time.

FIIs also seem to have a new found faith in the stock, as they have raised their holdings from 12.88% in Q4 to 15.96% in Q1. And on a YoY, this stake has risen from 7.84%. On the other hand, Domestic Institutions seem to have lost faith as they have reduced their holding from 8.89% to 11.82%. Its JV with Volvo, VE Commerical Vehicles plans to invest Rs.1000 crore by end of 2014, which includes the new bus manufacturing facility and expansion of existing truck making facilities.