Royal Enfield bookings back to pre-COVID level, three-month delay in new product launches

Royal Enfield has been among the first automotive companies in India to sell all existing inventory of BS-IV motorcycles, thereby becoming fully compliant with the new BS-VI emission norm ahead of the mandated timeline.

By:Updated: Jun 13, 2020 3:35 PM

Royal Enfield has resumed operations at its manufacturing facilities

Announcing the financial results for the quarter and year ended 31 March 2020, Eicher Motors Limited revealed its total revenue from operations was recorded at Rs 2,208 crore, down by 12% as compared to Rs 2,500 crore in the corresponding quarter of FY 2018-19. EBITDA was Rs 432 crore, down 37% as compared to Rs 685 crore in the same quarter of the previous financial year. Profit After Tax was Rs 304 crore as compared to Rs 545 crore during the same period last year. Royal Enfield sold 163,083 motorcycles in the quarter, a decline of 17% from 197,567 motorcycles sold over the same period in FY2018-19.

For the financial year ended 31 March 2020, Royal Enfield’s total revenue from operations was down by 7% to Rs 9,154 crore, compared to Rs 9,797 crore recorded for the year ended March 2019. EBITDA was Rs 2,180 crore, down by 25% compared to Rs 2,903 crore. Profit After Tax was recorded at Rs 1,827 crore as compared to Rs 2,203 crore in the same period last year.

Royal Enfield sold 697,582 motorcycles in the year, down 15% from 822,724 motorcycles sold in FY 2018-19. Motorcycle sales to international markets have shown significant growth of 96% at close to 38,700 motorcycles, over the previous financial year.

As the lockdown is easing out, we see strong initial customer interest and confidence. Both at Royal Enfield and VECV, we have transitioned our entire product portfolio to the new BS-VI emission norms, and also managed to sell our entire BS-IV inventory well ahead of the mandated timeline, Siddhartha Lal, Managing Director of Eicher Motors Ltd, said.

“We have a strong balance sheet and cash position, a robust business model with a very focused approach, and an exceptional management team at Royal Enfield and VECV. This has helped us tremendously in facing current challenges and gives us the confidence that we will emerge stronger from this crisis.”

During this quarter, Royal Enfield added 100 new Studio Stores, taking the overall retail touchpoints to 1,521 across India; at 921 dealerships and 600 Studio Stores. The company significantly expanded its international market network during the year 2019-20. Exclusive stores have now almost doubled from 42 stores in 18 countries to 77 stores in 21 countries; 10 stores were added during this quarter.

We have introduced new products and new initiatives to create better accessibility and build increased engagement. Our global online community has been growing at a significant rate over the last year – we now have a 7.5 million-strong online community. Going forward, we will focus on enhancing this digital engagement and the overall purchase and ownership experience through newer, more seamless digital platforms, Vinod K Dasari, CEO, Royal Enfield said.

Also read: Digital engagement crucial for recovery from COVID-19 sales slump: Royal Enfield

Dasari also noted that thanks to the ease of transaction through online platforms, bookings at Royal Enfield are back to the pre-COVID level. New product launches have been affected to a large extent with only about a three-month delay.

For the quarter ended 31 March 2020, VECV’s revenue from operations was Rs 2,101 crore, down by 35% from Rs 3,209 crore in the same period last year; EBITDA was Rs 38 crore, down 86% as compared to Rs 274 crore in the corresponding quarter of the previous year. There was a loss of Rs 26 crore as compared to Profit After Tax of Rs 139 crore during the same period last year. VECV sold 11,629 trucks and buses in the quarter, a decline of 45% from 21,010 trucks and buses sold over the same period in the last financial year.

Commercial Vehicle industry reeled under pressure for the most part of the last financial year with annual sales lower by 40% and Q4 with 55% respectively. This quarter saw the commercial launch of our BS-VI solution – EUTECH 6, which offers a unique mix of Eicher’s Euro VI expertise, mileage superiority and industry-first uptime solutions. With this, we are in a distinctive position to offer a comprehensive BS-VI platform to the customers which will enhance their productivity, efficiency and profitability. This business proposition coupled with competence building done across our network gives VECV an edge in the CV industry, Vinod Aggarwal, MD and CEO, VECV, said.

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