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Informist, Thursday, Nov. 6, 2025

 

By Anand JC

 

MUMBAI – Robust despatches of Royal Enfield motorcycles are expected to propel the earnings growth of Eicher Motors Ltd. for the September quarter to multi-quarter highs, according to analysts. However, higher marketing expenditure and product launch costs could hit the company's operating margins.

 

For Jul-Sept, Eicher Motors' consolidated net profit is expected to rise at a seven-quarter high of 29% on year to INR 14.14 billion, according to the average of estimates from 10 brokerages. These projections range from a low of INR 12.97 billion by Nirmal Bang Equities to a high of INR 14.75 billion by JM Financial Institutional Securities.

 

The consolidated top line of Eicher Motors is seen growing at a 12-quarter high of nearly 42% on year to INR 60.33 billion for the reporting quarter, according to the average of the 10 estimates. The revenue forecast of INR 56.63 billion by Prabhudas Lilladher is the lowest and the estimate of INR 62.05 billion by Nuvama Wealth Management is the highest.

 

Apart from the iconic Royal Enfield motorcycles, New Delhi-based Eicher Motors also makes commercial vehicles through VE Commercial Vehicles, its joint venture with Swedish group Volvo. Royal Enfield had an 87% market share in India's mid-sized motorcycle segment in 2024-25 (Apr-Mar). Eicher Motors sells these two-wheelers to over 70 countries across North America, Latin America, Europe, and other regions.

 

Analysts have attributed Eicher Motors' earnings growth to strong sales of Royal Enfield motorcycles. Eicher Motors benefited from the surge in despatches ahead of the festival season and the cut in the goods and service tax on motorcycles with an engine capacity up to 350 cubic centimetres.

 

The company sold 326,375 motorcycles in the reporting quarter, up just over 43% on year and nearly 23% on quarter. In contrast, its commercial vehicle despatches grew a more modest 5% on year and a paltry 1% on quarter to 21,901 units during the September quarter.

 

"Royal Enfield volumes increased by 43% on a yoy basis in 2QFY26 led by strong demand trends in domestic and export markets. As a result, we expect revenues to increase by 42% yoy in 2QFY26," Kotak Securities said in a note. However, the brokerage expects that the average selling price of Royal Enfield motorcycles has fallen a percentage point on year, partially due to a higher share of bikes below 350 cc. The average selling price of Royal Enfield motorcycles had remained stable around INR 185,000 in the year-ago quarter and the June quarter, according to Motilal Oswal Financial Services.

 

The company's consolidated earnings before interest, tax, depreciation, and amortisation is expected to be INR 15.09 billion for the September quarter, up nearly 39% on year, according to the average of nine estimates. These estimates don't vary very widely – the projection of INR 14.13 billion by Prabhudas Lilladher is the lowest and the estimate of INR 15.55 billion by Nirmal Bang Equities is the highest.

 

Kotak expects the company's EBITDA margin to contract 60 basis points on year to 25.7% due to higher marketing and advertising spends, increased domestic sales of lower-priced bikes below 350 cc, higher launch cost of the Meteor 350, and cost pressure due to an increase in raw material prices. However, Kotak expects better operating leverage and higher export sales to cushion the blow. For the same reasons, Axis Securities has forecast a sharper 147-bps fall in EBITDA margin. Eicher Motors had reported an EBITDA margin of 26.3% in the year-ago quarter and 25.1% in the June quarter.

 

Analysts will watch for Eicher Motors' outlook on demand and updates on product launches. Eicher Motors is yet to announce the date when it will detail its September quarter earnings. 

 

Of the 21 research reports on the automaker available with Informist, 14 have a 'buy' or equivalent rating on the stock with an average target price of INR 5,818. Of the remaining seven, three have a 'hold' rating with a target price of INR 5,251 and the other four have a 'sell' or equivalent rating with an average target price of INR 4,586.

 

At 1238 IST, shares of Eicher Motors were at INR 6,833.50 on the National Stock Exchange, down 1.4%. The stock has risen roughly 25% since the company declared its June quarter financials on Jul. 30. 

 

Following are the consolidated Jul-Sept earnings estimates for Eicher Motors from 10 brokerages in descending order of the estimate of net profit in INR million:

 

Brokerage	Net sales	Net profit	EBITDA
JM Financial Institutional Securities Pvt Ltd	61,352	14,753	15,362
Nuvama Wealth Management Ltd	62,050	14,687	15,087
HDFC Securities Ltd	58,727	14,626
Motilal Oswal Financial Services Ltd	60,781	14,422	15,545
Emkay Global Financial Services Ltd	61,352	14,268	14,786
YES Securities (India) Ltd	60,425	14,140	15,130
ICICI Securities Ltd	59,427	14,089	15,273
Kotak Securities Ltd	61,029	14,045	14,932
Prabhudas Lilladher Pvt Ltd	56,631	13,429	14,128
Nirmal Bang Equities Pvt Ltd	61,477	12,971	15,549
Average	60,325	14,143	15,088

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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