India’s Eicher tops profit estimates on strong Royal Enfield sales

BENGALURU (Reuters) -India’s Eicher Motors reported a bigger-than-expected jump in first-quarter profit on Thursday due to strong sales of its Royal Enfield motorcycles.

The company’s consolidated net profit jumped 50% to 9.18 billion rupees ($111 million) in the April-June quarter, beating analysts’ average estimate of 8.50 billion rupees, per Refinitiv data.

Eicher and other two-wheeler makers such as TVS Motor and Bajaj Auto have benefited from improved demand in the quarter on the back of easing inflation.

Eicher’s revenue from operations rose 17.3% to 39.86 billion rupees in the quarter, helped by a 21% jump in sales of Royal Enfields.

Its sales of commercial vehicles, such as buses and trucks, it makes in partnership with Sweden’s AB Volvo rose 12%. However, this is a much smaller business compared with its motorcycles division.

Analysts expect demand for two-wheelers to improve further in the upcoming festival season, boosted by new product launches and exports.

However, Eicher’s dominance of the premium motorcycle market with the Royal Enfield is now under threat with the entry of Harley-Davidson and British rival Triumph.

Eicher Motors’ shares ended 1.4% higher ahead of the results. They tumbled 6% in July when Bajaj announced its partnership with Triumph and Hero, India’s top two-wheeler maker, launched a locally-made Harley. ($1 = 82.7090 Indian rupees)

(Reporting by Dimpal Gulwani in Bengaluru; Editing by Savio D’Souza)