Capacity Expansion to Support

EICHERMOT

’s Premiumization Push

surged 6.5% to a 52-week high of ₹7,805 after reporting stellar Q3FY26 results. Consolidated EBITDA rose 30% YoY to ₹1,556.7 crore, driven by 21% volume growth in Royal Enfield motorcycles. Margins expanded to a six-quarter high of 25.5%, supported by lower expenses and disciplined execution. Strong domestic demand, aided by GST rate cuts, and resilient performance in its Volvo Eicher Commercial Vehicles (VECV) joint venture reinforced the company’s growth momentum. Financial & Operating Performance - Consolidated revenue: ₹6,114 crore, +23% YoY. - EBITDA: ₹1,556.7 crore, +30% YoY; margin at 25.5%, +130 bps YoY. - Bike volumes: +21% YoY, domestic growth +24% YoY. - Average realization per bike: ₹1.82 lakh, +0.8% YoY. - EBITDA per vehicle: ₹48,300, +7% YoY. Segmental Highlights - Royal Enfield: Strong domestic demand post-GST cut; recovery in >350cc segment. - VECV JV: Volumes up 24% YoY to 26,086 units, reinforcing commercial vehicle strength. - Nine-month FY26 volumes: +27% YoY, set to outpace FY25 growth of 10%. Competition & Market Position - New entrants (Hero-Harley, Bajaj-Triumph) selling 1–6K units/month, vs RE’s ~92K units/month (10MFY26 average). - RE retains dominance in mid-size motorcycle segment despite competitive launches. Capacity Expansion & Cost Management - Cheyyar facility expansion to raise annual capacity to 2 million vehicles (+35%) by FY28. - Raw material cost pressures persist, but price hikes in Apr, Jul, and Jan help offset. - Management expects marginal margin improvement in Q4. Valuation & Outlook - Stock up 56% in past year, trading at 33.4x FY27E EPS, slightly above long-term average of 31x. - Strong demand, premiumization, and capacity expansion support growth trajectory. - Valuation remains rich; sustained volume growth is critical to justify premium multiples.