Eicher Motors Ltd’s shares have declined by 5.5% since it announced the March quarter results. Initially, there was hope that the premium motorcycle segment will be insulated from the general weakness in demand for two-wheelers. Even so, Eicher Motors reported a sharp drop in Ebitda (earnings before interest, tax, depreciation and amortization) margins, falling 410 basis points to 27.4% from a year earlier. After all, if Ebitda per vehicle is intact and if volumes are falling, the company’s profits will naturally fall. Most others have cut back profit margin estimates, too, as Eicher Motors is forging ahead with expansion of its dealer network and launch of new products.

Source: Mint May 14, 2019 17:15 UTC