>EICHER MOTORS LIMITED: Q4CY11 – Another Quarter of stellar Performance; CY11 consolidated PAT up 63% to `3.1 bn

• Eicher Motors Ltd (EML’s ) consolidated revenues increased 26.8% Y-o-Y to `15.7 bn in Q4CY11 against `12.4 bn in Q4CY10 due to 25% Y-o-Y volume growth in the VE Commercial Vehicle (VECV) business and 28% Y-o-Y volume growth in the Royal Enfield business.


• EBITDA grew 27.7% Y-o-Y to `1.5 bn in Q4CY11 against `1.2 bn in Q4CY10 due to price increase and better product mix in both the businesses.


• PAT grew 55.7% Y-o-Y to `854 mn in Q4CY11 against `549 mn in Q4CY10. This was led by 80% Yo- Y increase in other income to `429 mn and lower tax rate which was at 22.6% in the current quarter as compared to 27.3% in Q4CY10.


Result Highlights
■ Best ever year(CY11) in terms of Revenues, EBITDA as well as PAT on consolidated basis
EML posted its highest yearly revenues, EBITDA and PAT in CY11. Consolidated revenues increased 29.3% Y-o-Y to `57.1 bn in CY11 against `44.2 bn in CY10 due to strong volume growth in both VECV as well as Royal Enfield businesses. For CY11 EBITDA grew 55.7% Y-o-Y to `5.9 bn against `3.8 bn in last year. EBITDA margins stood at robust 10.4% for CY11. PAT grew 63.4% Y-o-Y to `3.1 bn in CY11 against `1.9 bn in CY10. EPS stood at `114.0 in CY11 against `70.3 in CY10.


■ Stand alone business posted robust performance on back of strong Royal Enfield demand
For CY11 stand alone revenues grew 51.6% Y-o-Y to `6.7 bn against `4.4 bn in CY10 due to 33.9% Yo-Y growth in volumes to 72,835 units and 13.2% Y-o-Y increase in realizations to `92,119. EBITDA margins stood at 12.1% for CY11 against 10.3% in CY10. PAT grew 65.3% Y-o-Y to `1.2 bn in CY11 against `754 mn in CY10.


■ VECV’s Heavy duty segment grew over 61% in CY11 against industry growth of 12%
VECV posted strong volume growth of 61.4% Y-o-Y in the Heavy Duty segment against the industry growth of 12%. Market share has improved 110bps to 3.1% in CY11 against 2.0% in CY10. For the month of December 2011 the market share stood at 4.8% in the heavy duty segment.


Valuation & Viewpoint
Eicher Motors Ltd at CMP of `1,770 is trading at a P/E multiple of 12.2x its CY13 consensus earnings of `145. With new Royal Enfield plant slated to commence production from Q1CY13, robust growth from the heavy duty segment and the new engine project coming on stream in CY13, company looks fairly priced at this juncture.




RISH TRADER