Eicher Motors Limited — Q3 FY25 earnings call

Call held 10 Feb 2025

Management summary

Eicher Motors delivered record Q3 results driven by strong festive demand and international recovery. Royal Enfield's domestic retail hit all-time highs with 12% festive growth despite overall industry softness. International volumes surged 71% YoY to 27,068 units. The quarter marked major milestones including Flying Flea EV debut at EICMA, Thailand CKD plant inauguration, and significant Board-level leadership transitions. VECV outperformed a declining industry, gaining market share across segments.

Highlights

  • Best ever Q3 revenue at INR 4,973 crores, up 19% YoY; EBITDA INR 1,201 crores vs INR 1,090 crores

  • EBITDA margin at 24.2% vs 26.1% YoY; PAT INR 1,171 crores including INR 164 crores VECV share, up 17.6%

  • Royal Enfield sold 2,69,039 motorcycles, up 17% YoY; domestic 2,41,971 units, up 13%

  • International volumes at 27,068 units, surging 71% YoY; best ever festive domestic retail

  • YTD retail growth of 7% (12% during festive period); Hunter 350 crossed 500,000 cumulative sales

  • VECV recorded highest ever Q3 sales of 21,012 units; LMD market share at 36%

  • Flying Flea EV brand debuted; CKD plant inaugurated in Thailand

  • Key leadership transitions: Siddhartha Lal to Executive Chairman; Govindarajan as MD EML

Key financials

  1. Consolidated Revenue ₹4,973 Cr +19%YoY
  2. EBITDA ₹1,201 Cr +10.2%YoY
  3. EBITDA Margin 24.2%
  4. PAT ₹1,171 Cr +17.6%YoY
  5. Royal Enfield Total Volumes 2,69,039 units +17%YoY
  6. Royal Enfield Domestic Volumes 2,41,971 units +13%YoY
  7. Royal Enfield International Volumes 27,068 units +71%YoY
  8. VECV Sales Volume 21,012 units +1.5%YoY
  9. VECV LMD Market Share 36%

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
    2,69,039 units Total Volumes8.5% Europe Market Share (Middleweight)8% Americas Market Share (Middleweight)9% APAC Market Share (Middleweight)5,00,000 units Hunter 350 Cumulative Sales
  • VE Commercial Vehicles
    21,012 units Q3 Sales9,702 units LMD Trucks Q336% LMD Market Share

Guidance & targets

Growth

  • Volume growth strategy Growth · FY25-26 · High confidence Focus on absolute growth over margin percentages; premiumization continuing
    Several launches and initiatives lined up, we are well prepared for our growth journey in India and global markets

    — B. Govindarajan

EV

  • Flying Flea launch EV · FY26 · Medium confidence On track for official launch
    We took our first steps into electric mobility with the debut of our EV brand - Flying Flea

    — Siddhartha Lal

Risks & concerns

  • EBITDA margin compression from volume-first strategy

    medium

    EBITDA margin dropped 190bps YoY to 24.2%. Management investing in marketing (Motoverse, launches) and adding features without full cost pass-through.

    Analyst acknowledged

  • Commercial vehicle industry weakness

    medium

    Total CV industry declined 1.7% in Q3. HD and LMD trucks down 5.4% and 4.4% respectively. Post-election softness and uneven monsoon cited.

    Management acknowledged

  • Global macroeconomic uncertainty affecting international expansion

    medium

    Geopolitical challenges impacting export markets. CV exports grew only 0.3%. Multiple markets facing headwinds.

    Management acknowledged

Areas of evasion (1)

  • Limited margin guidance

Q&A highlights

3 direct
EBITDA margin decline and volume vs margin strategy Direct
EBITDA margin stood at 24.2% against 26.1% last year - driven by investments in marketing, events (Motoverse), product launches, and value additions to products without proportionate price increases

190bps YoY margin decline highlights the tension between volume-first strategy and profitability; key debate point for investors

Asked by Analyst

International volume surge and CKD strategy Direct
International volumes at 27,068 units, up 71% YoY. Thailand CKD plant inaugurated. UK #1, Europe 8.5% share, Americas 8%, APAC 9%

Massive international recovery signals success of CKD strategy and brand-building investments paying off globally

Asked by Analyst

CV industry decline vs VECV outperformance Direct
Total CV industry declined 1.7% but VECV delivered highest ever Q3 at 21,012 units with 36% LMD market share; bus demand surging 17.3%

VECV's ability to gain share in a declining market validates product strategy and distribution expansion

Asked by Analyst

1 min read 5 chapters

Detailed narrative

Record Quarter Amid Industry Slowdown

Eicher Motors achieved best-ever Q3 with revenue of INR 4,973 crores (up 19% YoY), though EBITDA margin contracted to 24.2% from 26.1% YoY. PAT grew 17.6% to INR 1,171 crores. Royal Enfield sold 2,69,039 motorcycles with 17% YoY growth. The festive season delivered 12% domestic retail growth even as the overall 2-wheeler industry slowed.

International Volumes Surge 71% with CKD Expansion

International shipments hit 27,068 units in Q3, up 71% YoY. Royal Enfield holds middleweight market share of 8.5% in Europe, 8% in Americas, and 9% in APAC. Thailand's first fully-owned CKD plant was inaugurated. REOWN pre-owned motorcycle business expanded to 256 cities across India.

Flying Flea EV Debut Marks Electric Mobility Entry

Flying Flea EV brand debuted at EICMA with two models - C6 and S6. Qualcomm partnership announced at CES for advanced connectivity. The company is on track for official launch of its first electric motorcycle. Investment in EV manufacturing facility is part of upcoming capex plans.

VECV Outperforms Declining CV Industry

VECV delivered highest ever Q3 sales of 21,012 units while the total CV industry declined 1.7%. LMD truck market share maintained at 36%. Bus demand was strong with industry growing 17.3%. HD bus surged 30.8%. Eicher entered SCV segment with electric-first Pro X platform.

Leadership Transition Reshapes Governance

Major Board changes: Siddhartha Lal became Executive Chairman; B. Govindarajan appointed MD of Eicher Motors (continuing as RE CEO); Vinod Aggarwal became Vice Chairman (continuing as VECV MD/CEO). Chairman of 25 years S. Sandilya retired after 50 years with Eicher Group. Two new Independent Directors inducted.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Automobile and Auto Components earnings calls