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Informist, Wednesday, May 20, 2026

By Anand JC

NEW DELHI – The year-on-year consolidated revenue growth of Eicher Motors Ltd. for the March quarter is expected to slow to a six-quarter low, as dispatches of the Royal Enfield motorcycles underperformed the industry due to production constraints, according to analysts' projections. The company's consolidated profit growth is expected to be the slowest for any March quarter since 2019-20 (Apr-Mar), when its bottom line contracted 12% on year.

Eicher Motors' consolidated net profit for the reporting quarter is expected to be INR 14.39 billion, which would translate to a year-on-year growth of 5.6%, according to the average of 15 analyst estimates. The projections for its net profit range from a high of INR 15.49 billion by Emkay Global Financial Services Ltd. to a low of INR 12.54 billion by ICICI Securities Ltd.

Its consolidated top line is projected to rise 13% on year to INR 59.41 billion for the March quarter, according to the average of 15 projections. The highest estimate for Eicher Motors' revenue is INR 60.10 billion by Elara Securities (India) Pvt. Ltd. and the lowest is INR 58.05 billion by ICICI Securities Ltd.

Eicher Motors is in the business of selling Royal Enfield-branded two-wheelers and commercial vehicles under its joint venture with Swedish automotive group Volvo, named VE Commercial Vehicles Ltd. Royal Enfield holds a 27% market share in the motorcycle segment where the vehicles have an engine capacity between 350 and 500 cubic centimetre capacity. Royal Enfield has a share of around 95% in the 500-800cc segment.

The company sold 317,561 motorcycles in the March quarter, up 12% on year but down 3.5% on quarter. Its domestic sales grew 14% on year to 285,435 units while exports slumped 2.4% to 32,126 units in the reporting quarter. Eicher Motors' financials are expected to be weaker quarter-on-quarter because of the decline in wholesale sales. Analysts expect its top line and bottom line to decline a touch over 2% on quarter for the quarter under review. The company's performance in the export market was sapped by weakness in the US and Mexico.

"RE volumes witnessed a decent 12% YoY growth (on a high base of last year) in Q4FY26, though growth has been slower compared to previous quarter due to capacity constraints," Equirus Securities Pvt. Ltd. said. The company's board in February approved a brownfield expansion at Eicher Motors' unit Cheyyar, Tamil Nadu which would increase Royal Enfield's production to 2 million units per year from 1.4 million units currently. Its board approved spending INR 9.58 billion over two years on this expansion which would help the capacity rise to the target by FY28.

"Royal Enfield volumes have been consistently growing in double digits with a strong product portfolio, model refreshes and investments in customer retention post which the management announced capacity expansion plans," Prabhudas Lilladher said. "The 350cc+ segment had seen decline post GST2.0 rate rationalisation," it added. The government had increased the goods and services tax on motorcycles with engine capacities over 350cc to a flat rate of 40%, up from 28% GST and 3% cess levied previously. Eicher Motors did gain from the cut in GST on motorcycles with 350cc engines to 18% from 28% levied previously.

The company faced no such capacity constraints for its commercial vehicles business. It has two truck plants, one in Madhya Pradesh's Pithampur and one in Bhopal. "For the current volumes, we are very well industrialised. So there is no concern as far as the capacity is concerned for the current year," Vinod Aggarwal, the chief executive officer of VE Commercial Vehicles, told investors in Eicher Motors' post-earnings call in February. VE Commercial Vehicles sold 33,898 units in the March quarter, up 18% on year.

Eicher Motors' consolidated earnings before interest, tax, depreciation, and amortisation for the March quarter is expected to be INR 14.88 billion, up 18% on year but down 2% on quarter, according to the average of 13 estimates. The highest estimate for the company's EBITDA is INR 15.21 billion by ICICI Securities Ltd. and the lowest forecast is INR 14.58 billion by Nirmal Bang Equities Pvt. Ltd.

"EBITDA margin is expected to increase by 90bps YoY as cost reduction efforts should offset RM (raw material) inflation, higher marketing spends and higher mix of 350cc motorcycles (which is margin dilutive)," Prabhudas Lilladher said. The company had reported an EBITDA margin of 24.7% in the year-ago quarter and 26.6% in the December quarter. The company hiked prices of select models in January and was looking to do the same for its entire portfolio as the commodity prices were "not cooling off...but certainly shooting up". "We're not taking aggressive price increases and focus continues to be on growth. But wherever we are finding significant sharp commodity movement, we are taking on a case-to-case basis," the company had said in the analyst call for the December quarter.

Eicher Motors has been moving beyond its automotive business to cater to the motor enthusiast community through a presence in the accessories segment. Contribution of revenue from its non-motorcycle business, which comprises apparel and accessories, improved to 15% in FY25 from 11% in FY19. The market will track the company's commentary on this segment as analysts expect further growth in the business over the medium term.

The company will disclose its March quarter financials on Friday. Shares of Eicher Motors are down roughly 6% since it reported its December quarter earnings on Feb. 10. Wednesday, its shares closed 0.5% lower at INR 6,849.50 on the National Stock Exchange. 

Of the 13 brokerage reports on the company available with Informist, seven have a 'buy' or equivalent recommendation on the stock with an average target price of INR 8,486, which is about 24% higher than the current market price. As many as five brokerage reports have a ‘hold' or equivalent recommendation on the stock with an average of INR 7,607 per share.

Following are the consolidated Jan-Mar earnings estimates for Eicher Motors from 15 brokerages in descending order of the estimate of net profit in INR billion:

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Edited by Akul Nishant Akhoury

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