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Informist, Wednesday, Jul. 29, 2026

 

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--Eicher Motors: Have inventory of around 10-12 days currently
--CONTEXT: Comments by Eicher Motors' mgmt in post-earnings analyst call
--Eicher Motors: Seeing substantial inflation across key materials
--Eicher Motors: Enquiries, bookings up; see growth momentum continuing
--Eicher Motors: Getting positive feedback for EV motorcycle Flying Flea
--Eicher Motors: Identified 6 mkts for Flying Flea, taking a phased approach
--Eicher Motors: Brazil biggest mkt outside India, leading overseas growth
--Eicher Motors: Seeing slight greenshoots for motorcycle mkt in US
--Eicher Motors:Roughly 25% of Royal Enfield customers are first-time buyers
--Eicher Motors: Seeing healthy growth in non-motorcycle business

 

By Anand JC and Eshitva Prakash

 

MUMBAI – Eicher Motors Ltd. Wednesday said setting up a completely knocked down unit for its Royal Enfield motorcycles in Indonesia is "on the cards" as the company seeks to fortify its presence in the Association of Southeast Asian Nations market. "We had a long chat and (are) trying to see whether we can become a CKD-operating plant out of Indonesia," a top company executive told investors in a post-earnings conference call. 

 

Thailand is the only country in the ASEAN market where Eicher Motors has a completely knocked down auto facility. The company was studying if it could sell its vehicles built at this plant to Indonesia under the ASEAN Free Trade Area agreement, with no quota restrictions. Eicher Motors has a distributor-based model in Indonesia, but has now identified an assembler there, as there are quota restrictions despite the trade agreement.

 

If things go as per plan, the company wants Indonesia to become a market similar to Brazil, where it is seeing good growth. Brazil remains the company's biggest market outside India and is leading its growth in the overseas markets. The company's revenue from international business crossed a record INR 10 billion in the June quarter, accounting for around 15% of its total revenue. It is also seeing good growth in Argentina and Colombia. 

 

Up north, the company is studying the Mexico market, where it is seeing growth. "The USA, which has been very slow, the market is showing some green shoots of growth in Q1 with the new trade deal," the official said.  

 

The company reported a consolidated net profit of INR 14.63 billion in the June quarter on revenues of INR 66.32 billion. Growth in earnings was driven by robust sales of its Royal Enfield motorcycles and commercial vehicles sold under the VE Commercial Vehicles joint venture.

 

Given the growth momentum in motorcycle sales, Royal Enfield currently has an inventory of around 10-12 days. "Overall booking walk-ins, telephonic enquiries, etc., continue to maintain a very stronger growth, which is slightly higher than our volume growth," the company said. Eicher Motors is confident of meeting this rising demand ahead of the festival season, given its expectation of freshly added capacity kicking in.

 

Eicher Motors can currently manufacture 1.5 million motorcycles per year at Oragadam and Vallam Vadagal in Tamil Nadu. These plants are nearing full utilisation. Earlier this year, the board had announced a brownfield capacity expansion plan for its plant in Tamil Nadu's Cheyyar. Wednesday, the company's board approved investing INR 12.25 billion for the first phase of greenfield expansion at its plants in Andhra Pradesh.

 

Once all the capacity expansion plans are completed, the total production capacity for Royal Enfield across all plants will reach around 2.45 million units per annum by 2029-30 (Apr-Mar). Eicher Motors will execute the capacity additions in modules. 

 

"Our inventory is lean because Q1 (Apr-Jun) had been very good. To overcome this, our initial module, which we had said should kick in by July, has kicked in on time," the company said. Eicher Motors is working on changes to billing methods and other efficiency measures to improve delivery times.

 

For the June quarter, Eicher Motors incurred total expenses of INR 53.41 billion, up 32% on year. Of this, cost of raw materials and components consumed stood at INR 33.24 billion, up nearly 22% on year.

 

"We are seeing substantial inflation in all costs. (Prices of) key commodities, aluminium, crude oil, steel, copper, precious metals, everything has gone up. In addition, we've also obviously had some disruption in supply chain and logistics," a senior official said. To offset this, the company increased prices of the majority of its motorcycles with an engine capacity of 350 cubic centimetres by 1.75% in April.

 

Eicher Motors earlier this year launched its first electric motorcycle, the Royal Enfield Flying Flea C6. "We have received a very positive customer response and to meet the growing interest, now we have decided to expand our footprints in Bengaluru, first five touchpoints, followed by another five," the company said. Given the positive response for the motorcycle, the company is planning to sell it in six more markets beyond Bengaluru in a phased manner.

 

On the customer profile of Royal Enfield motorcycle buyers, the company said around 25% are first-time buyers. "With the launch of Hunter... the first-time buyers are also going up. That is how it is actually helping us get more volumes," the company said.

 

The company operates its apparel business through its non-motorcycle division as part of its lifestyle branding strategy. "We are seeing more than 30% growth in accessories and apparel. Overall, we are seeing very healthy growth in the non-motorcycle business," the company said. 

 

"We started off our accessories business with a penetration of only about 25–40%. Currently, our accessories penetration has gone to almost about 87%," the official said, adding that 87% of the consumers who are buying Royal Enfield motorcycles are buying the accessories from the company.

 

Wednesday, shares of the company closed 0.7% lower at INR 7,779 on the National Stock Exchange. The company announced its results after market hours.  End

 

Edited by Saji George Titus

 

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