September 08, 2008

Eicher Motors Q4 2008 net profit dips by 6.7% YoY

Reuters reported that Eicher Motors Limited's January to March 2008 quarter net profit fell by 6.7% YoY to INR 194.6 million from INR 208.7 million on high steel prices and could continue to impact margins in the coming quarters. While, its net sales rose by 5.5% YoY to INR 6.53 billion.

Eicher, which makes and sells trucks and Royal Enfield motorcycles, however said that it expects to grow faster in the year to March 2009, as it gains market share from expanding sales and a wider marketing network.

Mr Siddhartha Lal CEO of Eicher Motors said that "In the light and medium duty commercial vehicles, we have increased our market share by a percent. In the heavy duty we have been acquiring a lot of key customers and entering new segment. We expect the trend to continue. The slow down in the pace of growth of the Indian commercial vehicle industry was most evident in the fourth quarter."

Mr Lal said that "Our operating margin and EBITDA declined due to commodity price increases and a temporary industrial relations related setback at our components business. With interest rates hardening and prices going up further and with further issues in retail financing there is a possibility that there will be further slowdown. Right now we look at flat market in near future."