Eicher Motors Q1 revenue rises 42 per cent

Last year, Eicher Motors produced 5.07 lakh Royal Enfield motorcycles

July 30, 2016 03:58 pm | Updated 07:31 pm IST - CHENNAI

Siddhartha Lal, MD & CEO, Eicher Motors, at the Royal Enfield factory at Oragadam, near Chennai on Friday ( July 29, 2016)
Photo : Bijoy Ghosh
To go with G. Balachander's report

Siddhartha Lal, MD & CEO, Eicher Motors, at the Royal Enfield factory at Oragadam, near Chennai on Friday ( July 29, 2016)
Photo : Bijoy Ghosh
To go with G. Balachander's report

Eicher Motors Ltd., the flagship company of Eicher Group, which manufactures Royal Enfield motorcycles, has reported 42 per cent increase in revenues to Rs.1,556 crore and a 65 per cent rise in earnings before interest, depreciation, tax and amortisation (EBIDTA) to Rs.470 crore, for the first quarter ending June 2016. This was aided by a 38 per cent rise in sales of its vehicles, according to a top official.

“We have started the new financial year on strong note and reported the best-ever quarter results and posting the highest ever quarterly income from operations and highest ever EBIDTA,” said Siddhartha Lal, Managing Director and CEO, Eicher Motors.

“We have good order book position. During this period, total motorcycle sales also posted 38 per cent increase,” he said.

More dealerships

Enthused by the result, he said the company would continue to expand its footprint in India with the addition of 66 dealerships. “Our immediate business outlook remains strong.”

Ramping up

Last year, Eicher Motors produced 5.07 lakh motorcycles and this year, it will manufacture 6.75 lakh units. By 2018-19, it will touch nine lakh units.

To meet the current demand, Eicher Motors, which has been producing 50,000 motorcycles a month at its Oragadam plants, near Sriperumbudur, will gradually increase it to 62,000 units. Currently, the waiting period for Royal Enfield’s popular motorcycles, which was about 11 months has been brought down to three months, he said.

New facility

Eicher is setting up its third plant at Vallam Vadagal near Sriperumbudur and also a R&D centre at Old Mahabalipuram Road in Chennai. Out of the proposed Rs.600 crore capital expenditure, a major portion has been earmarked for the new plant that would become operational by September 2017. The unit will house paint shop, vehicle assembly, frames, engines and fuel tanks.

On the new R&D unit, Mr. Lal said: “Currently, we are operating out of two rented facilities in OMR. About 300 engineers are working on core product development in Chennai and 70 in the U.K. The Chennai facility will be ready in 18-24 months. It is envisaged to accommodate 1,000 engineers. At any point of time, we are working on two to three platforms. We want to bring the entire engineering team under one roof at the new facility.”

Mr. Lal said exports formed a small portion of their total revenue. Besides India, they were focusing on South East Asian and Latin American markets to increase global foot print for mid-sized motorcycles.

Recently, Eicher Motors also announced its tie-up with Flipkart to sell Royal Enfield gear and accessories.

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