Q2FY23 Preview: Eicher Motors: Consolidated revenue seen at Rs35,366 million, PAT at Rs6,845 million

Result date: 10^th November, 2022
Recommendation: Buy
Target price: Rs3,400
 
For the September 2022 quarter, standalone volumes of Eicher Motors grew 68% over the year-ago quarter and 11% sequentially. In the VECV business, volumes increased 16.5% over the year-ago quarter and inched up 1% sequentially. The company’s consolidated revenue could grow at a robust 57.2% over the year-ago quarter and 4.1% sequentially.

Consolidated EBITDA margin could expand 271 basis points over the year-ago quarter, but decline 86 basis points sequentially. Key margin tailwinds include fall in commodity prices, operating leverage and price hikes. Key margin headwinds include adverse impact of Hunter (4‐5% sequential fall in average selling price, lower margin).

Eicher Motors’ consolidated results reflect VECV results, as ‘share of profits from JV’ under Ind‐AS. Consolidated Profit After Tax (PAT) could grow 83.4% over the year-ago quarter and 12.1% sequentially.

Important management insights to watch out for:

• Demand trends across key markets
• Outlook on input costs, pricing action, margins

Rs. Million	September 2022 estimates	QoQ change	YoY change
Revenue	35,366	4.1%	57.2%
EBITDA	8,346	0.4%	77.6%
EBITDA margin	23.6%	(86) bps	271 bps
Profit After Tax	6,845	12.1%	83.4%

Source: IIFL Research