Eicher Motors beats profit estimates as Royal Enfield domestic sales surge

Indian automaker Eicher Motors reported a bigger-than-expected quarterly profit on Tuesday, helped by strong domestic sales of its Royal Enfield motorcycles.

The Himalayan 450 adventure bike manufacturer posted a consolidated net profit of 14.21 billion rupees ($156.9 million), up from 11.71 billion rupees a year before and against analysts' estimate of 13.95 billion rupees, per data compiled by LSEG.

The results included a one-time charge of 554.5 million rupees tied to India's new labour codes that were enacted in November.

Eicher Motors is India's largest premium motorcycle manufacturer, with a portfolio largely made up of 350 cc bikes. The company hugely benefited from India's tax cuts in late September, which lowered taxes on two-wheelers of engine capacity up to 350 cc to 18% from 28%.

Overall sales of Royal Enfield bikes jumped 21% during the quarter, led by strong domestic sales of models such as the Hunter 350 and Meteor 350. Domestic sales rose 24% from a year earlier.

That helped boost revenue by 23% to 61.14 billion rupees, beating analysts' estimate of 60.37 billion rupees.

The results also included a profit contribution from Eicher's commercial vehicle joint venture with Volvo, which posted a nearly 12% growth on higher truck sales.

Eicher Motors approved a 9.58 billion rupee investment to raise capacity at a plant in the southern Tamil Nadu state, which will lift overall capacity to 2 million from 1.46 million units currently. The expansion is expected to be completed by the fiscal year ending March 2028.

The company's shares closed 1.4% higher before the results.

Peers Bajaj Auto, TVS Motor and Hero MotoCorp all reported higher quarterly profits in recent weeks, with one-time charges tied to India's labour code leading to profit misses for TVS and Hero. ($1 = 90.5490 Indian rupees)

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