Eicher Motors Limited, the parent company of Royal Enfield has announced that it will invest Rs 1,300 crore in its motorcycle and commercial vehicle (CV) business in the current financial year 2018-19.
The Gurgaon-based company had reported a consolidated net profit of Rs 462 crore for the fourth quarter ending March 2018, while its profit for the same period in the previous year was Rs 459 crore.
Despite strong sales performance, Eicher Motors faced a Rs 187.03 crore loss from winding up their personal utility vehicle business- Eicher Polaris Private Limited (EPPL). EPPL formed in collaboration with the American Polaris Industries Inc in 2012 was decided to be shut down by the board in March with immediate effect.
Rs 800 crore that will go to the motorcycle business will be utilized to for various activities including setting up phase-2 in its third plant at the Vallam Vadagal (near Chennai), develop new products and construct technology centre in Chennai.
The company's targeted capacity would be 950,000 units for this financial year. It is also planning to set up wholly owned subsidiaries in Thailand and Indonesia.
For the fourth quarter, Eicher Motors reported an increase in revenues from operations to Rs 2,528 crore from Rs 1,888 crore last year. Sales for the quarter under review is a net of GST that was implemented in July 2017 and therefore cannot be compared with the year-ago numbers.
EBITDA (earnings before interest, tax, depreciation and amortisation) for the March 2018 ended quarter was up by 36.3% to Rs 797 crore. Margins rose to 29% from 28.7% a year ago.