Eicher Motors Limited

Eicher Motors reported strong consolidated financials for Q3 FY26, with revenue reaching ₹6,114 crores, a 23% increase over the previous year's ₹4,973 crores. EBITDA grew by 30% to ₹1,557 crores from ₹1,201 crores, and PAT increased 21% to ₹1,421 crores compared to ₹1,171 crores in Q3 FY25. This robust performance was attributed to all-round growth across both Royal Enfield and VE Commercial Vehicles (VECV) segments.

Royal Enfield continued its steady growth journey, selling 3,25,773 motorcycles in Q3 FY26, a 21% increase from 2,69,039 units in Q3 FY25. India sales contributed significantly with 3,00,426 motorcycles, up 24% YoY. The company maintained its dominance in the middle-sized motorcycle segment with an 88.9% market share. However, international volumes saw a slight decline of 6.36% YoY, totaling 25,347 units.

VECV delivered its best-ever Q3 performance, with volumes growing 24.2% YoY to 26,086 units. LMD truck sales increased by 28.3% YoY to 12,447 units, securing a 34.5% market share. Heavy-duty truck sales also grew 14.9% to 6,850 units. While bus sales declined 3.3% YoY to 3,624 units due to tender timing, the parts business saw a 14.4% growth to ₹810 crores, and exports surged 72.5% YoY to 2,056 units. VECV's revenue for Q3 was ₹7,019 crores, up 21% YoY, with EBITDA at ₹652 crores (up 26.1%) and EBITDA margin at 9.5%.

The EML Board approved a significant capacity expansion for Royal Enfield at its brownfield Cheyyar manufacturing facility in Tamil Nadu. This investment, estimated at ₹958 crores over two years, aims to increase annual production capacity from the current 1.4 million units to 2 million units by FY27-28, with full 2 million capacity available by the beginning of FY29. The expansion will be implemented modularly to align with demand and ensure cost-efficient operations.

Management highlighted that margin improvement was driven by operating leverage, fiscal discipline, and value engineering initiatives. Pricing actions included a 0.5% blended price increase in January and 140 basis points increase last year. While commodity prices are not cooling off and are expected to exert some pressure, ongoing value engineering efforts, including weight reductions and optimization of precious metal usage, are in place to mitigate the impact.

Royal Enfield's international strategy involves a country-by-country approach. The US market is anticipated to benefit from a potential tariff reduction to 18% (from 41-42%) pending clarity on steel/aluminum tariffs. Europe and the UK are considered 'calibration years' due to pre-registration vehicles and discounting. LATAM, particularly Brazil, is a 'North Star' with strong growth, and SAARC markets are being developed cautiously due to political situations.

Eicher Motors provided an update on its electric motorcycle portfolio under the Royal Enfield brand. The C6 electric model, designed for city mobility, is 'almost ready for production' and is expected to launch within the next quarter. The S6 electric model, a Scrambler version, is planned for launch later in the year, around the EICMA time. The company is adopting a cautious, build-as-you-go approach to develop the electric category.