Eicher Motors: Riding healthy demand

Eicher Motors: Riding healthy demand

Shares Eicher Motors rallied nearly 5% in the early trade on January 3 after the company reported its December monthly sales number.
The 2-wheeler maker clocked 7% rise in sales to 73,739 units in December 2021, against 68,995 units in December 2020.
However, its export rose 144% at 8,552 units versus 3,503 units, YoY.
The company’s Commercial vehicle segment sales increased by 25.8% to 6,154 units during December 2021, against 4,892 units sold in December 2020.

Its total domestic sales were up 27.6% at 5192 units versus 4069 units, YoY.
The company reported its best-ever reading in last several months. On year on year (YoY) basis, the sales of Royal Enfield flagship brand grew 7% from 68,995 units in December 2020.
The key highlight for the month was robust volume prints at Royal Enfield, sustenance of which could subside growth concerns at the Eicher Motors.

While, announcing September quarter (Q2FY22) results in November, the company’s management said it expects a swift volume recovery ahead, led by improving chip supplies and a healthy order book. Management reiterated its focus on new products and network expansion.
The management stated that once the semi-conductor shortage eases, output would begin to improve. While domestic demand remains sluggish, Royal Enfield is seeing increased traction in exports, which are expected to surpass 60,000 units for the first time (+58% YoY) in FY22E.

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