Eicher Motors Q2FY22 Results Preview | Subdued RE volumes to overshadow strong performance by VECV business

Eicher Motors Ltd, the maker of iconic Royal Enfield ( Shaft) motorcycle, marketable vehicles and tractors, is coming out with its results on November 3 for the quarter ended September 21.
Experts anticipate its earnings to decline between 5 percent and 7 percent on a monthly base and gains are anticipated to dip by 7-9 percent.
The company had reported net deals of Rs crore and a PAT of Rs 343 crore in the alternate quarter of the former fiscal time. In the former quarter of this fiscal time, the net deals for the company stood at Rs crore with a profit after duty of Rs 237 crore.
What prospects do brokerages have?
A report from Emkay Research expects volumes to fall 17 percent Time-Over-Year (YoY) with average realisations perfecting by 15 percent owing to price hikes and product blend in terms of a advanced share of 350 CC motorcycles.
It expects net deals to decline4.1 percent on an annualised base to Rs crore with EBITDA coming by at Rs 372 crore which is a decline of 21 percent from 2020’s EBITDA of Rs 471 crore. EBITDA perimeters are anticipated to contract 387 bps to18.2 percent due to lower scale and detainments in pass-through of commodity affectation.
On a daily base, earnings are anticipated to ameliorate3.6 percent with EBITDA clocking a rise of2.7 percent on a Quarter on quarter (QoQ) base. EBITDA perimeters are anticipated to remain flat successionally and while PAT is looking to ameliorate by 28 percent from last quarter.

The brokerage expects a decline of11.8 percent in net profit at Rs 303 crore. It says,” Share of gains from Volvo-Eicher Commercial Vehicles (VECV) JV may rise to Rs 26 crore from a loss of Rs 4 crore last time, owing to specially high volumes (85 percent).”
ICICI Securities (Isec) expects a soft performance from the company in this quarter on flattish QoQ volumes of Shaft at1.23 lakh units in this quarter. Consolidated net deals are anticipated at Rs crore declining 7 percent from last time and up1.2 percent from the former quarter. It expects the realisations for the company to ameliorate about4.5 percent q-o-q with amalgamated realisations of Rs1.59 lakh/ unit due to advanced share of> 350 cc motorcycles within the overall blend.

An EBITDA of Rs 355 crore is anticipated for the quarter with EBITDA periphery of17.9 percent, declining 50 bps on a QoQ base. The decline in perimeters is driven by advanced commodity prices and absence of operating influence.
The PAT is anticipated to come in at Rs 317 crore, down 8 percent on a monthly base but up 34 percent on a daily base. The brokerage says, “ We anticipate VECV profit share at Rs47.4 crore (VECV volumes over 160 percent QoQ to units)”.

Kotak Institutional Equities anticipate net deals to come down5.8 percent YoY to Rs. Still, it’s a growth of1.8 percent over the former quarter.
The brokerage says, “ We anticipate Royal Enfield earnings to decline 7 percent YoY in this quarter led by 18 percent YoY decline in volumes, incompletely neutralize by 14 percent YoY increase in ASPs due to richer model blend and price increases taken over the once many diggings.”

EBITDA is anticipated to contract by17.8 percent on a monthly base to Rs 387 crore in this quarter with EBITDA perimeters squeezing by 283 bps to19.3 percent and perfecting by 86 bps on a successionalbasis. The brokerage expects VECV to report an EBITDA periphery of 6 percent in this quarter compared to1.1 percent in the former quarter of this time due to operating influence benefits.
The stock closed at Rs on November 2, down Rs17.55 from its former close. The stock is over 25 percent over the once time but flat in this fiscal time. The stock is down 2 percent over the once 3 months and down 8 percent over the once one time.