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Eicher Motors Q2 FY2008-09 net profit up 205 percent

Eicher Motors has posted a net profit of Rs 429 million for the July-September quarter, FY2008-09, up from Rs 140 million for the corresponding period last year. The 205 percent growth in net profit was mainly on account of the Rs 393.5 million which Eicher received from Volvo, as part of a non-compete arrangement.

Eicher and Volvo signed a joint venture agreement in May this year, for manufacturing light and medium commercial vehicles. As part of the pact, Eicher relinquished its own medium and light commercial vehicle business and hence received the non-competing amount.

Eicher's total operating income, however, came down from $1.23 billion in the second quarter of the last fiscal to $1.09 billion in the second quarter of the current fiscal.

In another recent development, Eicher Motors has approved a proposal to buy-back its equity shares, following a request to this effect from its promoters. The board of directors of the company approved the buy-back offer upon request of its promoters and principal shareholders - Eicher Goodearth Investments Ltd. (EGIL).

The buy-back would in the same proportion as sale of promoter holding to global auto major Volvo (ratio of promoter shares sold to Volvo to the total holding of shares by promoter), at the same price of Rs 691.68 per share.

[Via: indiaautotive]

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