Q1FY24 Preview: Eicher Motors: Revenue seen at Rs. 40,946 million, PAT at Rs. 8,540 million

1 Aug 2023 , 10:45 AM

Result date: 3^rd August, 2023

Recommendation: Buy

Target price: Rs. 3,800

Standalone volumes of Eicher Motors grew 22% over the year-ago quarter and 4% sequentially. Realizations too moved up a bit over the year-ago quarter. In the VECV business, company’s volumes grew 12% over the year-ago quarter, but fell 25% sequentially. Analysts at IIFL Capital Services expect the company’s consolidated revenue to grow 20.5% over the year-ago quarter and 7.6% sequentially.

Standalone business’ EBITDA margin could remain largely flattish both sequentially as well as over the year ago quarter, balancing the effects of lower share of exports and healthy operating leverage. VECV business’ EBITDA margin could decline 198 basis points sequentially, with benefits arising from lower discounts in trucks largely being offset by the negative operating leverage. Consolidated EBITDA margin could decline 53 basis points sequentially and 45 basis points over the year-ago quarter.

Eicher Motors could witness 39.9% growth in Profit After Tax (PAT) relative to the year-ago quarter.

Important management insights to watch out for:

• Demand trends across urban and rural markets
• Outlook on pricing, input costs and margins

Rs. Million	June 2023 estimates	YoY change	QoQ change
Revenue	40,946	20.5%	7.6%
EBITDA	9,833	18.3%	5.3%
EBITDA margin (%)	24.0%	(45) bps	(53) bps
Profit After Tax	8,540	39.9%	(5.7)%

Source: IIFL Research