India’s Eicher Motors posts record Q2 profit on strong Royal Enfield sales

BENGALURU (Reuters) -India’s Eicher Motors reported a larger-than-expected rise in second-quarter profit on Friday, helped by strong sales of its Royal Enfield motorcycles.

Eicher, which also makes buses and trucks, said its consolidated net profit rose 54.7% to a record 10.16 billion rupees ($122 million) in the three months to Sept. 30 from a year earlier.

Analysts, on average, had expected a profit of 9.29 billion rupees, per LSEG data.

While two-wheelers are largely a barometer for rural demand, premium offerings, where Eicher’s Royal Enfield has the largest market share, caters to a more affluent Indian population that is largely unaffected by inflation.

Eicher’s total revenue rose nearly 17% to an all-time high 41.15 billion rupees, riding on a nearly 13% climb in Royal Enfield sales.

Motorcycles accounted for about 92% of the company’s total sales.

Other two-wheeler makers TVS Motor, Bajaj Auto and Hero MotoCorp also topped profit estimates last month.

The beats came despite two-wheeler makers reporting a 1.6% fall in September-quarter sales, dragged by muted demand for entry-level models, according to data from the Society of Indian Automobile Manufacturers.

Eicher’s commercial vehicle segment, in which it has a partnership with Sweden’s AB Volvo for the manufacturing of buses and trucks, also recorded its highest-ever sales in the quarter.

Its rival in the commercial vehicle segment, Ashok Leyland, missed profit estimates on Thursday.

Eicher’s shares closed unchanged from a day earlier ahead of its results.

They rose nearly 10% so far this year, compared with a more than 29% climb in the Nifty Auto index.

($1 = 83.2650 Indian rupees)

(Reporting by Varun Vyas in Bengaluru; Editing by Sohini Goswami)