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    Eicher Motors

    EICHERMOTStrong
    Automobile and Auto Components·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

    8

    • 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

    1

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

    What Changed3

    vs Q3 FY26

    Guidance items7 → 3 (-4)Risks discussed3 → 4 (+1)Q&A highlights8 → 3 (-5)

    Key financials

    Single quarter

    11 metrics
    1. 01Consolidated Revenue₹6,172 Cr+45%YoY
    2. 02EBITDA₹1,512 Cr+39%YoY
    3. 03PAT₹1,369 Cr+24.5%YoY
    4. 04Royal Enfield Total Volumes3,27,067 units+45%YoY
    5. 05Royal Enfield Domestic Volumes2,92,703 units

    Segment breakdown

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

    Guidance & targets

    3
    CategoryTargetPriority
    Capacity
    Annual production capacity
    Above 1.35 million motorcycles
    		High
    Growth
    Demand outlook
    Continued growth in H2
    		High
    Commodity Impact
    Commodity cost pressure
    40 bps negative impact offset by 50 bps price increase
    		Medium

    Risks & concerns

    5
    RiskSeverity

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

    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

    high

    Commodity cost inflation from precious metals and aluminum alloys

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

    medium

    Capacity constraints limiting near-term growth

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

    medium

    APAC international markets sluggish, Thailand political disruptions

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

    medium

    Areas of Evasion(1)

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

    Q&A highlights

    3

    “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)

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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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