India’s Royal Enfield motorcycle maker posts higher second-quarter profit

India’s Eicher Motors maker of Royal Enfield motorcycles, reported higher second-quarter profit on Thursday, riding on a jump in sales both domestically and outside the country.

The company said its consolidated net profit rose 24.5% year-on-year to 13.69 billion rupees ($155.75 million) in the three months to September 30.

Royal Enfield recorded its highest jump in motorcycle sales in more than three years, rising 43.2% year-over-year.

Eicher Motors, which leads motorcycle sales in the premium category in India, logged a 26.8% increase in sales of motorcycles with engine capacity above 350cc, such as the ‘Himalayan’, indicating strong consumer appetite for premium and higher margin bikes.

Royal Enfield’s overseas shipments, typically more profitable than domestic sales, jumped 55.1%, helped by expansions into newer geographies this year.

Industry-wide two-wheeler sales in India rose 7.4% in the quarter ended September, helped by a boost in demand during the local Navratri and Diwali festivals.

Momentum was further supported by recent consumption tax cuts on motorcycles upto 350cc, which supported demand for both entry-level and premium models.

Sales of models with upto 350cc engine capacity like ‘Meteor 350’, which make up 86.5% of total motorcycle sales for the company registered growth of 46.2%.

Eicher, which also makes trucks and buses in a joint venture with Volvo Group, said total revenue from operations rose 44.8% to 61.72 billion rupees.

Rival Bajaj Auto reported a 23.7% rise in quarterly profit helped by higher exports last week, while Hero Motocorp will report its quarterly results later in the day.