Eicher Motors Q3 Results Review - Sequential Margin Expansion Expected: Systematix

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Royal Enfield, the motorcycle brand of Eicher Motors. (Photo: Noufal Tariq/Unsplash)

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Systematix Research Report

Eicher Motors Ltd.'s Q3 FY23 Ebitda was inline with consensus but below our estimates owing to lower benefits from commodity costs correction for the quarter.

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Ebitda margin at Royal Enfield and VE Commercial Vehicles Ltd. came in at 23.9% (up 20 basis points QoQ) and 6.8% (up 80 bps QoQ), respectively.

For Royal Enfield, management indicated that Hunter350 continues to see robust demand and new launches (Super Meteor 650 launched in Q3) should further support volumes.

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Network expansion and improved product portfolio in export markets are yielding positive results; exports now account for 18% of the topline versus 5% a few years back.

We see signs of the two wheeler industry bottoming out, after a sharp slowdown post BS-VI transition, with consistently higher demand in the premium segment.

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