Shares of Eicher Motors dropped nearly 7% on Tuesday as the Royal Enfield motorcycle maker's heavy spending on new launches hurt profit margins, with analysts expecting the company's focus on growth to keep the pressure on profitability.

Eicher Motors posted weaker-than-expected Ebitda margin, which contracted 190 basis points (bps) to 24.2 per cent in Q3FY25, from 26.1 per cent a year ago

Eicher Motors announced an 18% rise in net profits for the Oct-Dec quarter on February 10. The shares closed lower ahead of the results announcement after Monday’s trading session.

India's Eicher Motors, which makes the Royal Enfield brand of motorcycles, reported third-quarter profit and margins below estimates on Monday, hurt by higher costs and as sales of lower-margin motorcycles outpaced those of higher-margin ones.

The company reported a profit after tax (PAT) of Rs 996 crore in the October-December quarter of the last fiscal.

Eicher Motors’ consolidated net profit surged 15.6 per cent year-on-year (Y-o-Y) to Rs 1,056 crore during the third quarter of 2024-25 owing to launches and strong demand in the festival season.

India's Eicher Motors, which makes the Royal Enfield brand of motorcycles, missed third-quarter profit estimates on Monday, hurt by a mix of high marketing expenses and sales of lower-margin motorcycles outpacing higher-margin models.