Eicher Motors shares decline over 9% on weak December sales

By: |
Published: January 3, 2019 1:39:57 AM

According to Motilal Oswal, while the company’s sales were affected by external factors starting July 2018, this was the first month when no such factor was at play.

The company sold 58,278 units of the two-wheelers in December 2018 compared with 66,968 units in the same period last year, a decline that analysts say is “no one-off”.

Shares of Eicher Motors took a pounding during Wednesday’s trade as it fell 8.7%, a day after the company reported 13% decline in sales of Royal Enfield motorcycles. The shares fell as much as 9.4% during intraday trade.
The company sold 58,278 units of the two-wheelers in December 2018 compared with 66,968 units in the same period last year, a decline that analysts say is “no one-off”.

The stocks fell despite VE Commercial Vehicles — a Volvo Group and Eicher Motors joint venture — witnessing a 2.4% increase in sales in December 2018 to 6,236 units compared with 6,087 units last year.

According to Motilal Oswal, while the company’s sales were affected by external factors starting July 2018, this was the first month when no such factor was at play.

“Our channel checks for RE (Royal Enfield) indicated broad-based weakness, but the magnitude of weakness has been a negative surprise,” the brokerage said in a report on Wednesday.

The weakness in demand is likely to continue as apart from increased cost of ownership due to heavy insurance outgo, the re-launched Jawa motorcycles is seen as an attractive alternative for potential Royal Enfield customers.

Mahindra & Mahindra has revived the classic brand in India recently and has launched two models starting at `1.55 lakh, a price segment in which Royal Enfield units are available.

Shares of Eicher Motors closed at `21,164.05 apiece on Wednesday, down `2,020. In the past one year the shares have lost 26.3%, underperforming the benchmark Sensex which has gained 6.14%. During this period, the market capitalisation of Eicher Motors has come down by `20,438 crore.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Logistics to be game-changer for delivery businesses amid Covid if they make this cost-effective move
2REC ties up with TajSATS to provide meals to frontline healthcare workers
3Getting high: Zomato to now home deliver alcohol in this state but not everyone can order