Eicher Motors Ltd.’s quarterly profit fell as sales continued to remain under pressure in the first full quarter of operations after India eased lockdown curbs.
India’s automakers were grappling with the worst slowdown in more than two decades even before the pandemic. The lockdown forced companies to stall operations, leading to a washout in the initial months. Sales gradually picked up from June after the country restarted most activities to revive an economy that’s headed towards a rare annual contraction in more than four decades. Automakers are now betting on a recovery during the festival season as they pushed inventory to dealers.
Sales for Royal Enfield rose 19.7% over the preceding month in September. Sales during the reported quarter, however, were down 9% year-on-year to 1,50,519 units. The company continued to witness a recovery in monthly sales as they rose 11% to 66,891 units in October.
Eicher Motors’ peer Hero MotoCorp Ltd., however, saw a rise in profit and revenue as sales jumped. Bajaj Auto Ltd., too, reported a decline in earnings and revenue on lower sales.
Eicher Motors’ commercial vehicles business, the worst-hit segment for automakers, also witnessed a monthly recovery in domestic sales. Volvo Eicher Commercial Vehicle reported a 34% jump over the preceding month in domestic sales in September. Sales, however, fell 31% year-on-year in the second quarter.
The company’s commercial vehicle sales rose 30% over the preceding month and 15.3% compared to the year earlier to 3,815 units in October.
Shares of Eicher Motors rose 0.91% before the quarterly results were announced, compared with a 0.46% drop in the benchmark Nifty 50.
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