Eicher Motors Ltd., the parent company of motorcycle giant Royal Enfield, has reported a 5.9% increase in its profit for the second quarter of the fiscal year 2018-19. The company’s net profit for the three-month period between July and September 2018 stood at Rs.548.76 crore compared to Rs.518.02 crore for the same period of last year. The company revealed its financial performance in a regulatory filing with the stock exchanges.
Though the company’s profit has increased for the second quarter, it missed the estimates of industry analysts. Analysts associated with Bloomberg estimated a net profit of Rs.580 crore for the motorcycles major.
The total income of Eicher Motors for the second quarter rose 11.8% to Rs.2,502.12 crore compared to Rs.2,237.24 crore for the corresponding quarter of the previous year. Revenue for the second quarter increased by 11.1% to Rs. 2,408.2 crore. The company reported an operating profit of Rs.729.4 crore, up 6.9% from the same period of last year.
Expenses for the second quarter also increased significantly as the company reported a 14.2% increase in its total expenses to Rs.1,752.82 crore. Among the major expenses incurred by the company, raw material costs increased by 10.3% to Rs.1,206.6 crore.
The company’s employee benefit costs also increased by 21.4% to Rs.176 crore. In September, workers at the Chennai manufacturing facility staged a protest demanding higher pay and manufacturing was affected as a result. It is estimated that manufacturing of 25,000 motorcycles got delayed due to this protest.
In the previous quarter (Q1 2018-19), the company’s net profit stood at Rs.576 crore. During this period, the company reported its highest-ever first quarter revenues at Rs.2,548 crore.
Source: Bloomberg Quint, Economic Times