About the Company:

Eicher Motors Limited, incorporated in 1982, is the listed company of the Eicher Group in India and a leading player in the Indian automobile industry and the global leader in middleweight motorcycles. The Company is engaged in the manufacturing and selling of Motorcycles, spare parts and related services. It manufactures the iconic 'Royal Enfield' brand of motorcycles, which leads the premium motorcycle segment in India. Royal Enfield is the oldest motorcycle brand having the production worldwide since 1901. Royal Enfield's product line includes the Bullet, Classic and Thunderbird models in 350cc. EML's 50-50 joint venture with the Sweden's AB Volvo, VE Commercial Vehicles Limited (VECV), designs, manufactures and markets reliable, fuel-efficient trucks and buses is one of India's leading manufacturers of trucks, buses, engines, and engineering components. VECV has a wide product range from 5t to 40t GVW trucks and 15-to-65-seater buses. The buses are sold under the Skyline and Starline brands.

A division of Eicher Motors Limited, Royal Enfield operates through more than 2000 stores across all major cities and towns in India and through nearly 850 stores in 65+ countries around the globe. Royal Enfield also has two world-class technical centres, in Bruntingthorpe, UK, and in Chennai, India. The company’s two state-of-the-art production facilities are located at Oragadam and Vallam Vadagal, near Chennai. Across the world, Royal Enfield has seven modern CKD assembly facilities in Bangladesh, Nepal, Brazil, Thailand, Argentina and Colombia.

Royal Enfield has 84% Market share in mid-size segment in India. It has also gained market share in domestic market, As of H1Fy26, company’s market share for >125cc motorcycles was 32.2% and 8.3% market share in motorcycles. On international front company has 8.3% market share in America, 9% in APAC and 9% in EMEA markets.

The company has also entered into a JV agreement with iTriangle Infotech Pvt Ltd, to jointly carry on the business of location intelligence solutions, fleet management solutions, commercial vehicles-related operations, advisory services, connected solutions, and other related businesses.

Business Verticals:

1. Royal Enfield manufactures and markets motorcycles under the ‘Royal Enfield’ brand and it has created beautifully crafted motorcycles since 1901. From its British roots, a manufacturing plant was established in Madras in 1955, a foothold from which Royal Enfield spearheaded the growth of India’s mid-sized two-wheeler segment.  

Royal Enfield’s premium line-up includes newly introduced electric vehicle brand, Flying Flea - the Classic-styled Flying Flea C6 and Scrambler-styled Flying Flea S6, Bear 650, Classic 650, Guerrilla 450 modern roadster, Hunter 350, Meteor 350, Super Meteor 650, Interceptor 650 and Continental GT 650 twins, the Shotgun 650, the new Himalayan adventure tourer, the Scram 440 ADV Crossover, the iconic Bullet 350 and Classic 350.

Flying Flea, endorsed by Royal Enfield, is the new City+ mobility brand that is an expression of Royal Enfield’s commitment to keep moving forever forward. Operating at the intersection of technology and lifestyle, Flying Flea is a new brand that continues a legacy of innovation and creates a new category for the global marketplace and beyond. With more than 40 patent applications filed for native and connected applications, end-to-end technology for the Flying Flea has been developed in-house, in partnership with industry-leading experts and brands. The brand is setting up an exclusive EV manufacturing space within its manufacturing facility at Vallam Vadagal. 

2. VE Commercial Vehicles Limited (VECV) is a joint venture between the Volvo Group and Eicher Motors Limited. In operation since August 2008, the company includes the complete range of Eicher branded trucks and buses, Volvo Buses and exclusive distribution of Volvo Trucks in India, engine manufacturing and exports for Volvo Group, Eicher Power Solutions and Eicher Engineering Components. A multi-brand, multi-division company, backed by innovative products & services, VECV today, is recognized as an industry leader for modernizing commercial transportation in India and the developing world. Company’s retail network comprises of almost 1,000 touchpoints across country.

Manufacturing Facility:

Royal Enfield has 3 manufacturing facilities in Chennai with a total production capacity of 12 lakh motorcycles per annum. It also operates 2 technical centers, located in Bruntingthorpe, UK, and Chennai, India, along with 5 modern CKD assembly facilities in Nepal, Brazil, Thailand, Argentina, and Colombia.

VECV has a manufacturing plant in Pithampur, Madhya Pradesh, with a capacity of 90,000 vehicles per year. It also operates a bus body manufacturing facility in Baggad, MP, with a current capacity of 15,600 per year, expandable to 19,200. Additionally, a new facility in Bhopal has an initial capacity of 40,000 trucks per year, scalable to 100,000.

Segment-wise Volumes and Market Share Analysis:

In Q2 FY26, the company reported total volumes of 21,901 units, registering a 5.4% year-on-year growth over 20,774 units in Q2 FY25. Overall market share stood at 18.5%, marginally lower than 18.9% in the corresponding quarter last year.

Segment Performance – Q2 FY26

• Heavy Duty (HD) volumes increased to 5,381 units from 5,155 units, reflecting a 4.4% growth, while market share remained stable at 9.5%.
• Light & Medium Duty (LMD) volumes rose 5.6% YoY to 10,096 units, though market share declined to 34.8% from 36.4%.
• 3.5–5T segment delivered strong momentum with volumes growing 20.4% YoY to 455 units, improving market share to 28.7% from 24.8%.
• SCV (2.0–3.5T) segment recorded 244 units, with a marginal 0.3% market share, reflecting early-stage scale-up.
• HD Bus volumes declined to 372 units versus 504 units last year, with market share easing to 7.1%.
• LMD Bus volumes fell 14.2% YoY to 2,845 units, and market share dropped to 21.0% from 25.3%.
• Total Bus volumes stood at 3,217 units, down 15.8% YoY, with market share declining to 17.1%.
• Exports emerged as a key growth driver, with volumes surging 61.3% YoY to 1,823 units, and market share expanding to 14.9%.
• VTI volumes were 534 units, down 5.0% YoY, though market share remained dominant at 98.2%.
• VBI volumes declined to 151 units, with market share at 2.9%.

KPI:

Financial Results:

Eicher Motors delivers strong volume-led growth in Q2 FY26, supported by record Royal Enfield performance and steady VECV contribution.

Eicher Motors reported consolidated revenue of around ₹6,170 crore, registering a sharp ~45% year-on-year growth. Net profit rose to about ₹1,369 crore, reflecting ~24% YoY growth, while EBITDA stood near ₹1,510 crore, translating into a healthy EBITDA margin of ~24.5%.

Growth Drivers

The company’s performance was primarily driven by Royal Enfield, which recorded its highest-ever quarterly volumes of ~3.27 lakh motorcycles. Strong festive demand, sustained traction in core 350cc models, successful new launches, and a sharp recovery in exports supported revenue growth and improved scale efficiencies.

The VECV commercial vehicle business continued to provide diversification benefits. VECV posted Q2 volumes of 21,901 units, marking mid-single-digit growth. Improved realisations, aftermarket growth, and better operating leverage resulted in a higher profit contribution to the consolidated results.

Margin & Cost Analysis

Despite strong topline growth, margins remained under moderate pressure due to higher raw-material costs, increased marketing spends, and investments in new product launches. Management’s strategy continues to prioritise volume growth and market expansion over near-term margin maximisation. Nevertheless, consolidated margins remained robust by industry standards.

Balance Sheet & Cash Position

Eicher Motors maintains a strong balance sheet with minimal leverage and healthy cash flows. Ongoing capital expenditure is focused on capacity expansion, product development, dealership expansion, and new platforms, positioning the company for long-term growth across domestic and international markets.

Strategic Outlook

Management remains focused on strengthening the Royal Enfield franchise globally, expanding export markets, scaling the premium motorcycle portfolio, and investing in future mobility initiatives. The commercial vehicle business is expected to benefit from cyclical recovery, infrastructure spending, and improving fleet replacement demand.

Key Risks

• Margin compression from sustained input cost inflation or aggressive promotional activity
• Demand volatility in two-wheelers due to macroeconomic or rural demand fluctuations
• Execution risks related to new launches and future mobility investments

Conclusion:

Eicher Motors’ Q2 FY26 performance reinforces its position as one of the most structurally sound players in India’s automotive landscape. Record Royal Enfield volumes, improving export traction, and steady contribution from the commercial vehicle business underline the company’s ability to grow across cycles. While near-term profitability may remain sensitive to input costs and elevated investment spends, the company’s strong balance sheet, disciplined capital allocation, and brand-led pricing power provide resilience and long-term earnings visibility.

The Indian two-wheeler industry is entering a phase of gradual recovery, supported by improving rural demand, stable interest rates, easing inflation, and replacement-led purchases. Premium motorcycles continue to outperform the broader market, driven by rising disposable incomes, lifestyle-driven consumption, and increasing global acceptance of Indian-made premium brands. Export markets are also expected to remain a key growth lever over the medium term.

The commercial vehicle segment is likely to benefit from sustained infrastructure spending, replacement demand, and improving freight utilisation. While short-term volatility may persist due to regulatory changes and fuel cost dynamics, medium-term fundamentals remain constructive.

Against this backdrop, Eicher Motors is well-positioned to capitalise on industry tailwinds through scale, premiumisation, and global expansion. Investors should monitor margin trends and cost pressures in the near term, but the company’s structural strengths suggest favourable long-term risk-reward, making it a compelling core holding for investors with a medium- to long-term horizon.

HET ZAVERI

info@smartinvestment.in

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