Eicher Motors Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Eicher Motors delivered record-breaking Q2 FY26 results driven by strong festive season demand and GST reduction on sub-350cc motorcycles. Royal Enfield dominated with 84% midsize motorcycle market share, with Classic 350 growing 24.5%, Meteor 350 growing 30%, Hunter growing 41%, and Bullet growing 70% YoY. VECV also posted strong results with improved margins and leadership in LMD trucks. Management is bullish on sustained demand momentum into H2, with capacity expansion underway.

Highlights

  • Best ever consolidated revenue of INR 6,172 crores, up 45% YoY from INR 4,263 crores

  • Highest ever EBITDA of INR 1,512 crores, up 39% YoY from INR 1,088 crores

  • Highest ever PAT of INR 1,369 crores, up 25% YoY from INR 1,100 crores (includes INR 135 crores VECV share)

  • Royal Enfield sold 3,27,067 motorcycles vs 2,25,317 in Q2 FY25; domestic sales at 2,92,703 units

  • Best ever festive performance with ~2.49 lakh motorcycles sold in Sep-Oct; 50% festive retail growth

  • VECV recorded highest ever Q2 sales of 21,901 units, up 5.4% YoY; #1 in LMD trucks at 34.8% market share

  • Capacity debottlenecked from 1.2 million to 1.3-1.35 million; new module to kick in from Q1 FY27

  • International volumes at 34,364 units; H1 international growth of 49% YoY at 78,548 units

Concerns

  • GST increase on 450cc and 650cc motorcycles to ~40% impacting demand for premium products

Key financials

  1. Consolidated Revenue ₹6,172 Cr +45%YoY
  2. EBITDA ₹1,512 Cr +39%YoY
  3. PAT ₹1,369 Cr +24.5%YoY
  4. Royal Enfield Total Volumes 3,27,067 units +45%YoY
  5. Royal Enfield Domestic Volumes 2,92,703 units
  6. Royal Enfield International Volumes 34,364 units
  7. VECV Sales Volume 21,901 units +5.4%YoY
  8. VECV Revenue (Standalone) ₹6,106 Cr +10.3%YoY
  9. VECV EBITDA ₹479 Cr +21.3%YoY
  10. VECV EBITDA Margin 8%
  11. VECV PAT ₹249 Cr +19.7%YoY

What they filed

Q1 FY27: revenue up 31.5%, net profit up 21.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,263 4,973 5,241 5,042 6,172 +45%6,114 +23%6,080 +16%6,632 +32%
EBITDA1,088 1,201 1,258 1,203 1,512 +39%1,557 +30%1,514 +20%1,591 +32%
Net profit1,100 1,170 1,362 1,205 1,369 +24%1,421 +21%1,520 +12%1,463 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Royal Enfield
    3,27,067 units Total Volumes84% Midsize Market Share30% Enquiry to Booking Conversion
  • VE Commercial Vehicles
    21,901 units Total Sales10,096 units LMD Trucks34.8% LMD Market Share10.5% HD Truck Market Share3,217 units Bus Division1,823 units Exports244 units EV Trucks Delivered Q2

Guidance & targets

Capacity

  • Annual production capacity Capacity · Q1 FY27 · High confidence Above 1.35 million motorcycles

    Previously 1.2 million → Above 1.35 million motorcycles

    We have ramped up the capacity to almost about 1.3 million to 1.35 million motorcycles... the next module is also kick-started

    — B. Govindarajan

Growth

  • Demand outlook Growth · H2 FY26 · High confidence Continued growth in H2
    We are bullish that our growth rate continues

    — B. Govindarajan

Commodity Impact

  • Commodity cost pressure Commodity Impact · FY26 · Medium confidence 40 bps negative impact offset by 50 bps price increase
    We have had a 40 basis point impact as far as commodity prices, mainly led by both precious metals and aluminum alloys... offset... also had a bit of price increase, which has also given us a positive impact of about 50 basis points

    — Vidhya Srinivasan

Risks & concerns

  • GST increase on 450cc and 650cc motorcycles to ~40% impacting demand for premium products

    high

    450cc recovery is slower than 650cc post GST hike. Management is appealing to government for uniform 18% rate but no guarantee of success.

    Both acknowledged

  • Commodity cost inflation from precious metals and aluminum alloys

    medium

    40 bps commodity headwind partially offset by 50 bps price increases and value engineering. Precious metal prices remain a headwind.

    Both acknowledged

  • Capacity constraints limiting near-term growth

    medium

    Retail growing faster than wholesale (50% vs 15% in October). Debottlenecking underway but new module capacity only from Q1 FY27.

    Analyst acknowledged

  • APAC international markets sluggish, Thailand political disruptions

    medium

    Thailand market not fully recovered. APAC going slow. US tariff situation being watched.

    Management acknowledged

Areas of evasion (1)

  • Customer demographic analysis post GST - promised to share in a fortnight

Q&A highlights

3 direct
GST impact on demand across segments Direct
Post GST, 350cc motorcycles are really doing well. 650cc is bouncing back better, 450cc is slowly recovering. We have appealed to authorities for 450cc and 650cc to also be brought down to 18%

GST reduction is a key demand driver; the split impact between sub-350cc (benefited) and above-350cc (initially hurt) shapes near-term product mix and margins

Asked by Kapil Singh (Nomura)

Capacity expansion and debottlenecking Direct
We have ramped up capacity to 1.3-1.35 million motorcycles... additional module capacity will start kicking in from Q1 next year

Running near full capacity with demand outstripping supply; capacity addition timeline critical for growth sustainability

Asked by Binay Singh (Morgan Stanley)

Margin outlook and absolute profit focus Direct
We are looking at absolute profit, and that's the focus. We want to continue to grow. Growth has to come from absolute profitability, not on the percentage

Management explicitly deprioritizing margin percentage expansion in favor of absolute profit growth, signaling continued investment in brand and marketing

Asked by Binay Singh (Morgan Stanley)

2 min read 5 chapters

Detailed narrative

Record Quarter Driven by GST and Festive Demand

Eicher Motors posted all-time high quarterly revenue of INR 6,172 crores (up 45% YoY), EBITDA of INR 1,512 crores (up 39%), and PAT of INR 1,369 crores (up 25%). Royal Enfield sold 3,27,067 motorcycles, with domestic volumes of 2,92,703 units. The festive season was the best ever with ~2.49 lakh units sold in Sep-Oct, representing 50% growth over the prior festive period.

GST Impact Creates Divergent Demand Patterns

The GST reduction to 18% on sub-350cc motorcycles dramatically boosted demand, with enquiry-to-booking conversion rising from ~20-21% to 29-30%. However, the 450cc and 650cc segments saw initial pre-buy followed by a dip. The 650cc is recovering faster while 450cc is slower. Management is lobbying government for uniform 18% GST across all motorcycle segments.

VECV Posts Strong H1 with Margin Expansion

VECV achieved highest ever Q2 sales of 21,901 units (up 5.4% YoY) and gained #1 position in LMD trucks with 34.8% market share. EBITDA margin improved to 8.0% from 7.3% YoY. The division announced INR 544 crores investment in AMT production facility in Ujjain for Volvo Group's global needs. Exports surged 61.3% in Q2 to 1,823 units.

Capacity Expansion Underway to Meet Surging Demand

Built capacity has been debottlenecked from 1.2 million to 1.3-1.35 million annually, primarily by rejigging lines for higher 350cc production. A new module investment was kickstarted ~2 months ago and will come online from Q1 FY27. Management indicated plants may need to run continuously through H2 to build inventory for next year's festive season.

International Markets on Recovery Path

H1 international volumes reached 78,548 units, up 49% YoY. Royal Enfield achieved #1 position in SAARC markets (Bangladesh, Nepal). Brazil is emerging as the largest market outside India with CKD operations running. Management plans to establish own operations in Germany. However, APAC markets remain sluggish and US tariff situation is being monitored.

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