Why Eicher Motors shares snapped six-session losing streak

Shares of Eicher Motors rallied over 5% on Friday, ending six sessions losing streak, a day after the parent company of Royal Enfield released its June quarter earnings. The largecap auto stock has fallen nearly 8% in the past six trading days as investors booked profit at higher levels after the counter touched its all-time high of ₹5,057.65 on July 26, 2024.

Early today, Eicher Motors shares opened 4.4% higher at ₹4,780.05 after ending 0.46% lower at ₹4,578.80 on the BSE. In the first two hours of trade so far, the auto heavyweight gained as much as 5.2% to ₹4,820, while the market capitalisation rose to 1.30 lakh crore. The counter witnessed a surge in buying as 38 thousand shares changed hands over the counter compared to a two-week average volume of 15 thousand stocks.

The share of Eicher Motors has risen 40% in the past 12 months; 24% in six months; and over 18% in the calendar year 2024. In the last one month, the auto stock saw a correction of over 1% amid profit booking. At the current level, the stock has climbed 47% from its 52-week low of ₹3,272.35 touched on November 1, 2023.

For the April-June period of the current fiscal, the motorcycles and commercial vehicles manufacturer reported consolidated net profit of ₹1,101 crore, up 20% from ₹918 crore in Q1 FY24. The bottom line was driven by favourable commodity prices, inventory benefits, and volume growth in the Royal Enfield (RE) segment. The company registered best-ever total revenue from operations of ₹4,393 crore in Q1 FY25, up 10.2% from ₹3,986 crore in the same period last year.

On the operating front, Earnings before Interest, Taxes, Depreciation, and Amortisation (EBITDA) climbed 14.1% YoY to ₹1,165.5 crore, while margin improved to 26.5% from 25.6% in the year-ago period.

“After a strong performance in FY24, we have started this year on a confident note, registering our best-ever quarterly financial performance with both Royal Enfield and VECV reporting steady growth,” says Siddhartha Lal, Managing Director, Eicher Motors.

The VE commercial vehicles, comprising Eicher trucks and buses and Volvo buses, recorded its best-ever first-quarter sales, gaining volumes in key segments, and reflecting its commitment to excellence and customer satisfaction, says Eicher Motors’ MD.

During the quarter under review, Royal Enfield recorded sales of 2,27,736 motorcycles compared to 2,25,368 motorcycles sold during the same period in FY 2023-24.

"Royal Enfield has witnessed a good start to FY25. Our diverse product range has strengthened our position in the mid-size segment across the globe. This quarter has been particularly notable for our performance in the international markets. We have launched Himalayan 450 across APAC, EU, UK, and Mexico,” says B Govindarajan, CEO - Royal Enfield and Wholetime Director, EML.

During the quarter, Royal Enfield launched the Guerrilla 450 and Himalayan 450 in international markets across APAC, EU, UK, and Mexico. The company is also gearing up to launch the 2024 Classic very soon. 

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