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Informist, Thursday, Nov. 13, 2025

 

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--Eicher Motors: Prolonged monsoons affected sales, see volume pick up in H2
--CONTEXT: Eicher Motors mgmt's comments in post-earnings call with analysts
--Eicher Motors: Bullish on above-average growth in Royal Enfield continuing
--Eicher Motors: Don't see EBITDA margin rise, focus on absolute PAT growth
--Eicher Motors: Demand for heavy-duty trucks hit by move to rail freight
--Eicher Motors: 450cc, 650cc motorcyles did well pre-GST change
--Eicher Motors: Demand for 450cc bikes returning slowly after GST change
--Eicher Motors: Sought lower, uniform GST for 350cc, 450cc motorcycles
--Eicher Motors: Inflation pressure there on margins
--Eicher Motors: Demand for 350cc bikes up more than expected after GST cut
--Eicher Motors: Expanding capacity for 350cc bike production to meet demand
--Eicher Motors: Exports to Latin America, SAARC doing well
--Eicher Motors: Retail demand in Europe doing well, wholesale not as much
--Eicher Motors: Exports on path of recovery, growth
--Eicher Motors: Enquiry, booking levels in festival season continuing Nov
--Eicher Motors: Raised prices to offset impact of rise in raw material cost

 

By Sunil Raghu and Aryan Khanna

 

AHMEDABAD/NEW DELHI - Eicher Motors Ltd.'s management Thursday said it continues to be bullish on above-average growth in Royal Enfield motorcycles, going ahead. What makes the company's management optimistic on this count is the cut in goods and services tax on 350 cubic capacity motorcycles to 18% and the enquiries and bookings seen in festival season continuing right into the month of November.

 

"...we had the capacity of about 1.2 million, with a particular mix of our 350cc, 450cc and 650cc. Now what is happening is post-GST, the 350cc demand is slightly higher than the 450cc and 650cc," the management told analysts in their post September quarter earnings call. With demand for 350cc motorcycles continuing to remain high, the company is now working on debottlenecking its plants to expand production capacity for motorcycles to over 1.35 million.

 

The company's management said that they sold nearly 25% higher year-on-year Classic 350 in the September quarter. Meteor 350, which it launched in multiple colours in September, too has seen 30% on-year growth, with Bullet 350, Battalion Black growing almost about 70% during the September quarter. The company sold 327,067 motorcycles in the September quarter, up over 45% on year and nearly 23% on quarter. 

 

Thursday, Eicher Motors announced its earnings for the September quarter. The company's consolidated net profit for the quarter grew over 24% on year to INR 13.69 billion. Revenue from operations rose nearly 45% on year to INR 61.72 billion. The company's consolidated earnings before interest, tax, depreciation, and amortisation was INR 15.12 billion for the September quarter, up nearly 39% on year.

 

The company's management said it could record this growth despite challenges arising out of early and prolonged monsoon affecting sales. The company had also taken a price hike in the months of April and July to offset rise in raw material costs. This too did not seem to have an impact on sales growth. The management expects the sales volumes growth to pick up further in the second half of the financial year ending March.

 

On the 450cc and 650cc motorcycles, the management said these two variants saw "very good" sales before the government announced the GST rate cuts. Post Sept. 22, when the GST rates were reduced, the company has seen a sizeable jump in the demand for 350cc motorcycles. Sales of 450cc and 650cc motorcycles have slowed down since the government kept the GST rates for higher cubic capacity motorcycles unchanged at 40%. The management said they have appealed to the authorities to cut GST on 450cc and 650cc motorcycles to a uniform rate of 18%.  

 

Other than the domestic market, Eicher Motors sells these two-wheelers to over 70 countries across North America, Latin America, Europe, and other regions. During Apr-Sept, Eicher Motors exported 78,548 motorcycles, a jump of 49% year-on-year. "Our products are getting accepted very well. Both in Argentina, Latin America, and Columbia also, it is doing very well," the management said. Other than Latin America, exports to South Asian Association for Regional Cooperation, or SAARC, region too are stated to do well. In Europe, the retail sales did better than wholesale sales, the company said.

 

Apart from the iconic Royal Enfield motorcycles, the New Delhi-based company also manufactures commercial vehicles through VE Commercial Vehicles, its joint venture with Swedish group Volvo. In contrast to motorcycles, Eicher Motors' commercial vehicle despatches grew a modest 5% on year and a paltry 1% on quarter to 21,901 units during the September quarter. The management said demand appears to be slowing down as heavier trucks had become more fuel efficient, with replacement demand getting postponed.

 

"...thing which has pulled down some of the heavy-duty trucks demand is also some migration towards the rail freight corridors," the company's management said citing example of a leading car maker in the country now moving nearly 25% of its cars through rails.

 

Given the dynamic scenario and to stave off any inflationary pressure being felt, the management said their focus would stay on net profit growth with its EBITDA margin unlikely to change much going forward.

 

Shares of the company, which were up 1% prior to the disclosure of its September quarter earnings, fell a little over a percent, minutes after the results were announced. However, the shares pared some of these losses to close 0.4% lower on the National Stock Exchange at INR 6,855 on Thursday.  End

 

Edited by Vandana Hingorani

 

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