Eicher Motors surged 10 per cent to Rs 2,389 on the BSE on Monday after the stock turned ex-date for stock split in the ratio 1:10. The company has fixed August 25, 2020 as record date for the stock split.
The company announced, on May 25, its stock split plan to make the stock more affordable for the small retail investors and increase liquidity.
On June 12, the company’s board approved the stock split in the ratio of 1:10 i.e. sub-division of equity shares of the company from the existing one (1) equity share of face value of Rs 10 each into ten (10) equity shares of face value of Rs 1- each.
At 9:37 AM, the stock was trading 8.57 per cent higher at Rs 2,358 as compared to 0.47 per cent gain in the S&P BSE Sensex. Around 16.1 lakh shares have changed hands on the NSE and BSE combined so far.
The company which manufactures the iconic Royal Enfield brand of motorcycles reported a loss of Rs 55 crore in the June quarter of FY21 (Q1FY21). It had posted a profit of Rs 452 crore in the corresponding quarter last year. The company's revenue from operations in the quarter under review declined to Rs 818 crore from Rs 2,382 crore in Q1FY20.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were at Rs 4 crore in the quarter as compared to Rs 614 crore in the same quarter of previous financial year.
In a post earnings call, top officials of Royal Enfield (RE) said that despite the rapid recovery in demand seen across all the key markets of the company, the Covid-19 pandemic-induced lockdowns have been impacting production.
In a post earnings report, Motilal Oswal said that Eicher Motors' inquiry and booking trends were up while supply-side issues were being addressed.
"We believe new products would help expand the addressable markets and drive the next phase of growth for RE. Volume recovery, led by new product launches, would drive margin recovery in FY22," the brokerage said.