Company Overview

Eicher Motors Limited (NSE:EICHERMOT) is the listed parent of Royal Enfield, the global leader in middleweight motorcycles. The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901. Focussed on bringing back simple, yet engaging and accessible motorcycling, Royal Enfield operates in India, and over 50 countries around the world. With modern development facilities in Leicestershire, UK and Chennai, India, Royal Enfield makes its motorcycles in Tamil Nadu for the world.1

In addition to motorcycles, Eicher has a joint venture with Sweden’s AB Volvo - Volvo Eicher Commercial Vehicles Limited (VECV) - which is driving modernization in India's commercial vehicle space, and in other developing countries. VECV has a complete range of trucks and buses from 5-55 tonnes, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-litre engines for Volvo Group.

For the twelve months ended March 2019, Eicher Motors recorded its highest ever total income of INR crores 9797 crores (net of excise duty) (approx 1.4 USD). Eicher Motors is listed on the BSE and National Stock Exchange, and has been part of the NSE’s benchmark Nifty 50 Index since April 1, 2016.

Royal Enfield

The oldest motorcycle brand in continuous production, Royal Enfield made its first motorcycle in 1901. A division of Eicher Motors Limited, Royal Enfield has created the mid-sized motorcycle segment in India with its unique and distinctive modern classic bikes. With its new manufacturing base in Chennai, India, Royal Enfield is able to grow its production rapidly against a surge in demand for its motorcycles. With more than 40% growth every year for the last 5 years, Royal Enfield is fast becoming a very important player in the global mid-size motorcycle market and is working towards re-inventing this space with motorcycles that are evocative and engaging and great fun to ride.2

Royal Enfield’s motorcycle line-up includes the newly launched Interceptor 650 and the Continental GT 650, powered by a modern 648cc twin cylinder engine. Royal Enfield also manufactures the Classic, Bullet and Thunderbird models in 350 and 500cc displacement and the purpose-built adventure tourer - Himalayan, powered by the new LS410 engine. Royal Enfield operates through 18 company-operated stores and 850+ dealers in all major cities and towns in India, and exports to over 50 countries across the world including the USA, UK, several European and Latin American countries, as well as the Middle East and South-East Asia.

Royal Enfield also organizes and supports many motorcycling events and rides globally, more prominently the Rider Mania – an annual gathering of Royal Enfield riders from all over the world to the lovely beaches of Goa, and the Himalayan Odyssey, the most arduous motorcycle ride over some of the toughest roads and highest mountain passes in the Himalayas. Royal Enfield also conducts the popular ‘One Ride’ where people around the world ride out on their motorcycles on the first Sunday of April.

Two-Wheeler Industry

Momentum of a strong growth in the two-wheeler industry in 2017-18 continued in the first quarter of 2018-19. The overall two-wheeler industry grew by 16% in the quarter ended June 30, 2018 as compared to the corresponding period in the previous year. By the end of first half of the financial year 2018-19, the industry began experiencing headwinds primarily on account of regulatory changes associated with insurance and safety norms which dampened consumer sentiment. These continued through the end of the financial year.3

Despite this, the overall two-wheeler industry volume in India reached an all-time high of 21.2 million in 2018-19, a growth of 5% over 20.2 million in 2017-18. Driven by a growth in motorcycles with engine displacement of up to 150cc, the motorcycle segment volume grew by 8% from 12.6 million in 2017-18 to 13.6 million in 2018-19. In contrast, after over a decade of consistent growth, the scooter segment recorded a 0.3% decline year-on-year with total volume remaining at about 6.7 million in 2018-19.

Royal Enfield Performance

India continued to remain Royal Enfield’s primary market with 98% of the total volume being contributed by India and the remaining being exported to over 50 countries. The company’s total volume including exports increased by 0.3% from 8,20,121 units in 2017-18 to 8,22,724 units in 2018-19.

In India, the company was not immune to the industry headwinds and weak consumer sentiments. These factors, coupled with regulation-driven price increases and floods in its largest market Kerala in August 2018, resulted in India volume growing by 0.2% from 8,01,230 in 2017-18 to 8,03,003 in 2018-19.

In 2018-19, the industry volume for motorcycles with engine displacement of above 125cc grew by 8%, driven by strong growth of 24% in the category above 125cc to 150cc, primarily on account of new launches and discounts. Royal Enfield’s market share in the above 125cc motorcycle segment declined from 27.0% in 2017-18 to 24.9% in 2018-19. However, its market share in above 150cc motorcycle segment improved from 42.8% in 2017-18 to 43.2% in 2018-19.

The industry volume for motorcycles with engine displacement of above 250cc declined by 1% on year-on-year basis. Royal Enfield continues to maintain its dominance in this segment with more than 95% market share. As a testament of Royal Enfield’s commanding position in premium motorcycle market in India, the introduction of the 650 Twins motorcycles increased the industry volume of above 500cc segment by almost 70% from 6,700 in 2017-18 to 11,257 in 2018-19.

Dealership Network

Royal Enfield continued to expand its distribution network to enhance accessibility across cities in India. The company added 90 stores during the year, increasing the total count to 915 stores with a presence in over 680 cities. To keep up with rising aspiration levels beyond the large urban cities, Royal Enfield is making inroads to the newer markets and expanding its footprints beyond these cities. During the year, the company opened more than 70% of the new stores in small cities and towns.


Inspired by a motorcycling way of life, Royal Enfield Apparel comprises riding gear, apparel and lifestyle accessories, which enable riders explore and express themselves, on and off the motorcycle.

International business

To establish Royal Enfield as a global brand and lead the middle-weight motorcycle segment in international markets, the company is building capabilities and brand equity across key geographies. Developing world-class products which are simple and fun to ride, expanding distribution network and implementing ‘Brand Led Growth’ initiatives are helping the company make inroads to developed and developing world alike. International sales volume grew by 4% from 18,891 in 2017-18 to 19,721 in 2018-19.

VE Commercial Vehicle Limited

VE Commercial Vehicles Limited (VECV) is a joint venture between Eicher Motors Limited and the Volvo Group. In operation since July 2008, the company includes the complete range of Eicher branded trucks and buses, VE Powertrain, Eicher’s components and engineering design services businesses, the sales and distribution business of Volvo Trucks as well as aftermarket support to Volvo Buses in India. VECV vision is to be recognized as the industry leader driving modernization in commercial transportation in India and the developing world.

The first Eicher truck was rolled out from its manufacturing plant at Pithampur, Madhya Pradesh in 1986, and after completing 33 years of operations in June 2019, the products have got endorsement from happy customers of over 7,41,786 vehicles.4

Eicher is a leading player in 4.9T – 16T segment with Eicher Pro 1000, Pro 2000 & Pro 3000 series of LMD trucks specifically designed to deliver a breakthrough trucking experience in India. Eicher’s 12-69 seater buses have a growing presence in the LMD school bus, staff and route-permit segments. ETB has also made strong inroads into heavy-duty trucks segment of 16T - 55T with Pro 5000, Pro 6000 & Pro 8000 series of HD Trucks.

Eicher Pro

On December 2, 2013, Eicher unveiled its “Eicher Pro” series of future generation trucks and buses at an impressive product reveal function in Pithampur. Adopting the most professional and holistic approach to modernize the Indian trucking industry, the brand’s new “Go Pro” philosophy offers higher productivity, profitability, and prosperity to the customers. The new Pro series promises to deliver:

  • Best-in-class fuel efficiency
  • Higher loading capacity
  • Superior uptime
  • Higher overall vehicle lifetime profitably

Volvo Trucks

Volvo Trucks provides complete transport solutions for professional and demanding customers, offering a full range of medium to heavy duty trucks. Volvo Trucks started its operation in India in year 1998. Over last 21 years, through its high-technology innovative products and services solutions, Eicher Motors has been driving progress in Indian market. Volvo Trucks in India is known for providing premium transport solutions to its customers with technologically advanced trucks supported by its highly competent and committed team of professionals. Volvo´s work is based on the core values quality, safety and environmental care.

Engine Manufacturing

Commemorating the successful completion of 10 years of partnership, VECV announced the commencement of commercial production at the technologically most advanced engine manufacturing plant in India at Pithampur, Madhya Pradesh. The initial capacity of the plant was set at 25,000 units per annum in Phase 1 at an investment of Rs 375 crores, and the current capacity stands at 75,000 units which is scalable to 100,000 with additional investments.

  • Global hub for meeting medium-duty automotive engine requirements of Volvo Group for five and eight-liter engines
  • The Euro 6-compliant diesel base engines will be supplied to Volvo Group plant in Venissieux, France, where they will be assembled for the Volvo Group Euro 6 requirements
  • The same platform has been adapted to Euro 3 to Euro 5 engine to cater Volvo Group requirements globally and BS4 engine to meet VECV requirement, further BSVI development is also completed to cater new emission norms in India.

Eicher Engineering Components

To tap the potential in the fast growing auto components and engineering sector and to cater the demands of the driveline and associated components of the globe, EEC has emerged as a paragon in gear manufacturing capabilities. World class facilities, offering high precision gearing solutions, Units were setup at Dewas (Madhya Pradesh), Pithampur (Madhya Pradesh) and in Thane (Maharashtra). The company has achieved excellence in manufacturing Power-train components and Gearbox assemblies for a worldwide clientele in the OEM and Aftermarket realm. In recent years, the group has continually invested in innovation, technology and expansion. As a result, the units continue to expand their capacities and efficiency, while adhering to their core principal of quality and manufacturing excellence.

  • Off-road, Mining Equipments and Material handling industries
  • Gained to design, engineer and manufacture complex gearing systems produced at the facilities having one of the finest machining capabilities and technology
  • Equipped with the Gleason, Leibherr and Lorenz cutting technology
  • Highest tonnage capacity of Heat treatment channelized through SQF, Nitriding or CGCF, Shot Peening, Shot Blasting and cream of the crop Swiss technology based Grinding capabilities purveys increased productivity and finishing.
  • Fortified Inspection capabilities and quality systems maintains the harmonious standards of quality.

Non-Automotive Engines

VE Commercial Vehicles Limited designs and manufactures Eicher’s automotive & non-automotive engines with best-in-class technology. The engines come with better design and enhanced aesthetic value, and are known for their high reliability, consistent quality, and high-fuel efficiency. The Engines and Gensets are also exported to regions like Middle East, Africa & SAARC Nations.

  • Remarkable Fuel Economy with Unmatched Engine Protections
  • 10%-15% over most of the other Engines
  • Low maintenance cost and longer service intervals
  • Robust, high-reliability engines with in-built oil cooler for continuous operations
  • Construction Equipment, Material Handling, Marine, Agro and Pumping
  • Superior Accessibility of all Service points
  • Availability of Spare Parts across the country
  • Quick Starting & smooth running
  • Excellent Block Loading Capacity
  • Excellent & unmatched fuel Efficiency
  • Longer Product Life Cycle


The company's industrial base includes an integrated Commercial Vehicle factory in Pithampur, producing Eicher trucks and a bus plant at Baggad. The organization also has manufacturing capabilities in Thane, Dewas and SEZ Pithampur, dedicated to manufacturing of transmission and differential gear boxes and gear box assemblies.5

Pithampur Plant

ETB completed 33 years of operations in India in the month of June 2019. The first Eicher truck was rolled out from its manufacturing plant in Pithampur, Madhya Pradesh in 1986 and over the past years, the products have got endorsement from happy customers of over 7,41,786 vehicles.. Eicher unveiled its entire new range of future generation trucks and buses at an impressive product reveal function in Pithampur on December 2, 2013. As a part of the product development process, the organization has a fully equipped vehicle and engine development center with fatigue lab, complete virtual vehicle integration capability, different simulations, in-house competence for electrics and electronics integration, a complete bus structure and interior trim design capabilities.

  • Fully integrated facility encompassing manufacturing operations, product development, purchase, supply chain and other support functions.
  • Spread over 82 acres of land with current installed capacity of 84,000 vehicles per annum.
  • Highly flexible, lean, and agile environment delivering high quality trucks.
  • Produces 1000 vehicles per acres.
  • Robotic Weld Shop
  • State-of-the- art new generation Paint Shop with e-Rodip Technology and
  • Modern Assembly Shop inline with VECV vision of driving modernization

Dewas Plant

The plant in Dewas, Madhya Pradesh is a center of manufacturing excellence and houses some of the technologically most advanced machines and equipment. The advanced technology available at this plant ensures that the transmission gears and shafts manufactured here are of the highest quality.

  • A battery of CNC Hobbing & Shaving Machines
  • Shaping Machines
  • Reishauer Gear Grinder RZ400
  • Gleason CWP Cutting Machines
  • Gleason Conifex Machines for Straight Bevel Gear
  • Robotic welding facilities for main body and under body welding
  • State-of-the-art Continuous Gas Carburizing Furnace (from Aichelin) - fully PLC controlled with robotics for Press Quenching and PLC Controlled Sealed Quench Furnaces (with hot oil quenching for reduced distortions)
  • Shaving Cutter Re-sharpening machine from Gleason Hurth

Thane Plant

The manufacturing set up in Thane houses progressive machines, and continues to expand its capacity and efficiency while adhering to the VECV’s core principle of delivering best-in-class quality standards.

  • Gleason CWP Cutting Machines
  • Gleason Conifex Machines for Straight Bevel Gear
  • Pfauter
  • Liebherr
  • Mitsubishi (CNC) and Cleveland Hobbing machines
  • Robotic welding facilities for main body and under body welding
  • State-of-the-art heat treatment facilities
  • CNC bore and Cylindrical grinding machines

Baggad Bus Plant

To capitalize on the opportunity of improved road infrastructure and growth of smart cities, an ultra-modern bus body manufacturing facility was set up at Baggad (Madhya Pradesh) in September 2013. The multi-model plant which manufactures Light, Medium and Heavy duty buses in Diesel and CNG also in alternate fuel (EV’s). The plant has a current installed capacity of 15,600 per annum, expandable to 19,200 per annum.

  • Produces Light, Medium and Heavy duty buses in Diesel and CNG also in alternate fuel (EV’s)
  • Spread over a huge expanse of 43 acres.
  • First of its kind across the globe which equipped with a high quality robotic paint system with wet on wet PU painting from single robot.
  • Use fire-retardant material to avoid any mishap
  • First bus plant in India which has received a Platinum Certificate from Indian Green Building Council (IGBC)
  • Supply customized buses to Gujarat State Road Transport Corporation (GSRTC), Punjab Roadways, Navi Mumbai Transport, Bihar Urban Infrastructure Development Corporation Ltd (BUIDCO).

Financial Highlights

For the quarter ended 31 December 2019, Eicher Motors’s total revenue from operations was at Rs. 2,371 crores, up by 1% as compared to Rs. 2,341 crores in the corresponding quarter of FY 2018-19; EBITDA was Rs. 592 crores, down 13% as compared to Rs. 680 crores in the same quarter of the previous financial year; Profit After Tax was Rs. 499 crores as compared to Rs. 533 crores during the same period last year. Royal Enfield sold 189,143 motorcycles in the quarter, a decline of 2% from 193,164 motorcycles sold over the same period in the last financial year.6

Commenting on Eicher Motors’ performance, Siddhartha Lal, Managing Director of Eicher Motors Ltd, said, “We’ve remained focused on its long term strategy. Eicher Motors has improved its retail network to bring in further accessibility. We’ve worked on transitioning its product portfolio to comply with the new BS-VI emission norms and also launched the new Royal Enfield Himalayan BS-VI. The 650 Twin motorcycles continue to enthrall global audiences, as the Interceptor 650 has been awarded ‘Bike of the Year’ by Motorcycle Cruiser magazine and Continental GT 650 has received 2019 best looking Naked / Standard Motorcycle of the year from Motorcyclist Magazine, both leading publications in the USA. While the commercial vehicle industry continues to face challenges due to slowdown, VECV remained profitable despite a sharp decline in its volume.”

Royal Enfield continues to strengthen its distribution network in India and across the world. During the last quarter, Royal Enfield added 7 new large format stores and 250 new Studio Format stores in India, taking the total to 1,400 retail touchpoints. In international markets, Royal Enfield added new stores across Thailand, Brazil, Argentina, France and the UK, increasing its overall touchpoints to about 675 stores including 67 exclusive stores. This network expansion, combined with sustained Brand and Marketing initiatives, have more than tripled sales outside India.

For the quarter ended 31 December 2019, VECV’s revenue from operations was Rs. 2,164 crores, down by 23% from Rs. 2,818 crores in the same period last year; EBITDA was Rs. 133 crores, down 28% as compared to Rs 186 crores in the corresponding quarter of the previous year. Profit After Tax was Rs. 30 crores as compared to Rs. 76 crores during the same period last year. VECV sold 12,391 trucks and buses in the quarter, a decline of 27% from 16,936 trucks and buses sold over the same period in the last financial year.


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Created by Asif Farooqui on 2020/05/18 02:13
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