Eicher Motors, the makers of Royal Enfield motorcycle and heavy vehicles, reported a 71 percent rise in consolidated net profit to Rs. 334.50 crore for the quarter ended March 2016. The net profit for the corresponding period last year was Rs. 195.30 crore. The company plans to invest Rs.1,000 crore in the current fiscal to enhance production capacity.
Consolidated revenues increased 47 percent to Rs. 3,765 crore during the quarter from Rs. 2,568 crore in the year-ago period, according to the company's regulatory filing to the Bombay Stock Exchange (BSE) on Friday.
The operating margin was 14.1 percent at Rs. 531 crore, as against 11.3 percent, year-over-year.
Eicher Motors said sales of Royal Enfied during the March quarter were the best till date.
"In this quarter, Royal Enfield sold 148,185 motorcycles, registering its best ever quarterly sales and posting a growth of 59.6% over 92,845 motorcycles sold in the same period last year," the company said.
Sales of Volvo commercial vehicles stood at 15,553 units in the quarter, up from 11,020 units, year-over-year.
Twelve-month net profit, revenues
Eicher Motors posted 61 percent rise in consolidated net profit to Rs. 1,083 crore and 40 percent increase in income from operations to Rs. 13,120 crore for 12 months ended March 31, 2016. Operating margin was higher at 13 percent.
New financial reporting period
The company changed its financial reporting period from calendar year to accounting year in 2015-16. Consolidated net profit stood at Rs. 1,278 crore and revenues at Rs. 15,688 crore for the 15-month period ended March 2016.
Measures to enhance capacity, rev up sales
Eicher Motors plans to invest Rs. 600 crore during the current fiscal to scale up production and boost sales.
"We will be investing Rs. 600 crores towards product development, setting up of the two technical centres, in Leicestershire, UK and Chennai, India, enhancing our manufacturing capacity and market development activities across geographies," Siddhartha Lal, managing director & CEO of Eicher Motors Limited, said in a statement.
"In FY 2016-17, we plan to manufacture 675,000 motorcycles. Our immediate business outlook remains strong and Royal Enfield continues to grow consistently, competitively and profitably towards leading and expanding the mid-sized motorcycle segment globally," he added.
The company also announced plans to ramp up investment to drive its commercial vehicles business. "We will be investing Rs 400 crores in VECV (Volvo Eicher Commercial Vehicles) towards product development and capacity expansion in FY 2016-17," Lal said.
Stock closes flat
On Thursday, the Eicher Motors stock closed at Rs. 19,687.45 on the BSE, down 0.30 percent from its previous close. The results were declared before trading closed for the day.