Eicher Motors Limited — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

Eicher Motors delivered a robust Q3 FY26, driven by strong volume growth across both Royal Enfield and VECV segments, leading to significant revenue and profit expansion. The company announced a substantial capacity expansion for Royal Enfield to meet future demand. While international Royal Enfield volumes and VECV bus sales saw slight declines, overall performance was strong, supported by pricing actions and value engineering.

Highlights

  • Consolidated Revenue reached ₹6,114 crores, marking a 23% growth over Q3 FY25's ₹4,973 crores.

  • Consolidated EBITDA stood at ₹1,557 crores, a 30% increase from ₹1,201 crores in Q3 FY25.

  • Consolidated PAT grew 21% to ₹1,421 crores, up from ₹1,171 crores in Q3 FY25.

  • Royal Enfield sold 3,25,773 motorcycles, a 21% growth YoY, with India sales up 24% to 3,00,426 units.

  • VECV recorded Q3 volumes of 26,086 units, a 24.2% growth YoY, and maintained 34.5% market share in LMD trucks.

Concerns

  • Royal Enfield's international volumes declined 6.36% YoY to 25,347 units from 27,068 units in Q3 FY25.

  • VECV's bus sales were down 3.3% YoY to 3,624 units, attributed to tender timing and lower institutional orders.

  • Management noted that commodity prices are not cooling off and anticipate 'a bit of a pressure... for some more time'.

Key financials

  1. Consolidated Revenue ₹6,114 Cr +23%YoY
  2. Consolidated EBITDA ₹1,557 Cr +29.6%YoY
  3. Consolidated PAT ₹1,421 Cr +21.3%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
    3,25,773 units Total Motorcycles Sold3,00,426 units India Motorcycles Sold25,347 units International Volumes88.9% Middle-sized Motorcycle Market Share
  • VE Commercial Vehicles (VECV)
    26,086 units Q3 Volumes69,597 units YTD Volumes12,447 units LMD Trucks Q3 Sales34.5% LMD Trucks Market Share6,850 units Heavy-Duty Trucks Q3 Sales3,624 units Bus Sales₹810 Cr Parts Business Revenue2,056 units Exports₹7,019 Cr Revenue₹652 Cr EBITDA9.5% EBITDA Margin₹338 Cr PAT

Capital allocation

high confidence
  • Capex Capex disclosed
    • Capacity expansion for Royal Enfield at Cheyyar manufacturing facility ₹958 Cr
    As you would have seen in our results, EML Board has just approved a proposal for capacity expansion at Royal Enfield. This will be achieved through a brownfield expansion at Cheyyar manufacturing facility at Tamil Nadu, taking our annual production capacity to 20 lakh units per year from the current 1.4 million to meet the rapidly expanding existing and the projected future demand. This project is aligned with our consistent growth focus and underscores our commitment to the evolving needs of our global community. For this expansion, we will invest an estimate of almost INR 958 crores over a period of 2 years, reaching the target capacity by FY 27-28.

Guidance & targets

Capacity

  • Royal Enfield Annual Production Capacity Capacity · FY27-28 · High confidence 2 million units per year

    Previously 1.4 million units per year → 2 million units per year

    This will be achieved through a brownfield expansion at Cheyyar manufacturing facility at Tamil Nadu, taking our annual production capacity to 20 lakh units per year from the current 1.4 million to meet the rapidly expanding existing and the projected future demand. ... For this expansion, we will invest an estimate of almost INR 958 crores over a period of 2 years, reaching the target capacity by FY 27-28.

    — B. Govindarajan

  • Royal Enfield Total Capacity Availability Capacity · beginning of fiscal year '29 · High confidence 2 million motorcycles
    Okay. Okay. And basically, the whole 2 million capacity will be available to us in the beginning of fiscal year '29. Is that the correct understanding?

    — Amyn Pirani

Volume

  • Royal Enfield Q4 Growth Momentum Volume · Q4 · Medium confidence continue
    So in Q4, I'm expecting the growth momentum to continue. Inquiries are better. Conversions are better, bookings are good. So there is a positive trend which is continuing. So Q4 also, we are positive that we will be growing more.

    — B. Govindarajan

  • Royal Enfield Next Year Industry Growth Volume · next year · Medium confidence high single digit
    Coming to the next year question, which you are talking about, I think the whole industry is looking at high single digit, that's sort of the growth. And the premium segment will grow. We will continue to outgrow the market. That's our ambition.

    — B. Govindarajan

Product Launch

  • Royal Enfield Electric C6 Launch Product Launch · next quarter time window · Medium confidence soon
    C6 is almost ready for production. You will see it in the market soon, but we will be doing a cautious approach of not going around and then saying here is a product. We'll build because a category has to be built, and we will build it slowly and steadily. That you will see it in the next quarter time window.

    — B. Govindarajan

  • Royal Enfield Electric S6 Launch Product Launch · around the EICMA time · Medium confidence during the course of the year
    And S6 will come during the course of the year around the EICMA time. That's the tentative plan of now.

    — B. Govindarajan

VECV Exports

  • Q4 Export Performance VECV Exports · Q4 · Medium confidence better
    And going forward, Q4 also is likely to be better as far as exports are concerned.

    — Vinod Aggarwal

What to watch in Q4 FY26

Royal Enfield Electric C6 Launch

next quarter time window
Current Almost ready for production
Target Launch in market

Why it matters

New product in EV segment, key for future growth and market diversification.

C6 is almost ready for production. You will see it in the market soon, but we will be doing a cautious approach of not going around and then saying here is a product. We'll build because a category has to be built, and we will build it slowly and steadily. That you will see it in the next quarter time window.

Risks & concerns

  • Commodity Prices

    medium

    Commodity prices are not cooling off and are expected to exert pressure for some more time, though value engineering efforts are in place.

    Management acknowledged

  • International Market Volatility (Europe/UK)

    medium

    Europe and UK markets are undergoing a 'market adjustment' or 'calibration year' due to pre-registration vehicles and discounting, making growth challenging.

    Management acknowledged

  • Political Situations in SAARC Markets

    low

    Growth in SAARC markets like Bangladesh and Nepal is being approached cautiously due to political situations and unrest.

    Management acknowledged

Q&A highlights

8 direct
Margin Performance Drivers Direct
I think, Chandramouli, I've been kind of consistently talking about the same message from a margin standpoint, okay? In 2022, as you know, on the sidelines of the Hunter launch, we had pivoted to rebalance. And there, we had talked about our focus on growing absolute volumes, absolute margins, and that's essentially what we've delivered.

Clarifies the strategic focus on balancing volume and margin growth, detailing factors like operating leverage, marketing spend timing, model mix, and VA/VE.

Asked by Chandramouli Muthiah

Capacity Expansion Details and Phasing Direct
So Chandramouli, first and foremost is, I think you are right, the 350cc demand has gone up post the GST, thanks to the reduction. And the 450cc and 650cc have slightly come down, but the rate of recovery is better. We are happy about that. So for 450cc and 650cc, there is a capacity which is built, which is good enough because currently, the utilization is slightly lower.

Provides clarity on the specific segments driving demand for capacity expansion (350cc) and the modular, brownfield approach to reach 2 million units by FY29.

Asked by Chandramouli Muthiah

Impact of US and EMEA Trade Deals Direct
If that goes off, mostly it will go off. That's what we are expecting in the fine print, then it will become an 18% for us, which is a good sign. It will open up the market for us. But the steel tariff, which is there, is common for everybody.

Explains the potential significant reduction in tariffs for the US market (from ~41-42% to 18%) and the removal of 6% duty in EMEA, which could boost international sales.

Asked by Chandramouli Muthiah

Commodity Price Outlook and Pricing Actions Direct
Yes. I think versus if you take other income from a I mean, it's literally a bit of timing also, which is coming through because we've had timing of spend in different quarters. So --

Details the commodity price environment (not cooling off), the role of value engineering, and specific pricing actions taken (0.5% blended increase in January, 140 bps last year) to manage costs.

Asked by Kapil Singh

Value Engineering Strategy Direct
Now the value engineering, we can be a bit more aggressive in terms of weight reductions, in terms of optimization and in terms of the precious metal usage in the catalytic converters. All those are different projects which are done. The funnel is very healthy, and it all is under testing.

Outlines the multi-faceted approach to value engineering, including scale benefits, low-cost country sourcing, and platform optimization, which are crucial for margin improvement.

Asked by Gunjan

Export Growth Strategy and Market Focus Direct
As I always mentioned, the international market for Royal Enfield has to be seen from country by country. It can't be that one outside India, what is the business. If I have to tell you some of the markets, which are developed markets, let's take the U.S.A. with all the confusion which is

Provides a detailed breakdown of international market strategies, highlighting Brazil as a 'North Star' and cautious approaches in Europe and SAARC due to market conditions.

Asked by Gunjan

Current Production Capacity and Daily Run Rate Direct
No, that's gone now, February and March. We don't have much of holidays, except the annual inventory which we have to do. So to that extent we will -- and if I had to tell you, we are delivering almost about 4,300 to 4,400 vehicles per day.

Confirms that Royal Enfield plants are running at full capacity, delivering 4,300-4,400 vehicles per day, indicating strong demand and production utilization.

Asked by Pramod Kumar

VECV Bus Segment Performance and Export Drivers Direct
First of all, as far as the bus industry is concerned, this year, the growth has not been that high as we had experienced in the previous years because the base was very high. So therefore, the growth rates have been moderate. And the second, the reason for our lower numbers is also due to some lower orders from institutional sales.

Explains the reasons for the decline in VECV's bus sales (high base, lower institutional orders) and identifies key geographies driving strong export growth (Middle East, Bangladesh, Nepal, Sri Lanka, Africa).

Asked by Yash Agarwal

3 min read 7 chapters

Detailed narrative

Q3 FY26 Consolidated Financial Performance

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 Business Highlights

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.

VE Commercial Vehicles (VECV) Performance

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%.

Royal Enfield Capacity Expansion

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.

Margin Management and Commodity Outlook

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.

International Market Performance & Trade Deals

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.

Royal Enfield Electric Portfolio

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.

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