Eicher Motors is the main bike model within the 250cc-750cc midsize market in India, Korea, and the UK, whereas rating second in Thailand, and third in France, Italy, and Australia. Let’s discover the corporate’s journey, its diversified enterprise segments, monetary progress, and strategic initiatives which have established its world presence.
(A) About
Eicher motors was included in 1982, a number one participant within the Indian car trade and the worldwide chief in middle-weight bikes. Eicher has a JV with Sweden’s AB Volvo to create Volvo Eicher Industrial Automobiles Ltd (VECV).
The JV is engaged in EML’s truck and bus operations, auto elements enterprise and technical consulting companies enterprise, in addition to in Volvo Group’s India truck gross sales and advertising capabilities, companies and spare components community for each Volvo vehicles in addition to buses.
(B) Trade
- As per SIAM information, 2W trade (home) recorded sale of 1,79,74,365 items in FY24 vs 1,58,62,087 items in FY23 and export sale of 34,58,416 items in FY24 as in comparison with 36,52,122 items in FY23.
- 2W EV trade sale reached 9.4 lakh items in FY24, a progress of 29% YoY.
- Industrial automobile sale (home) in FY24 was 9,67,878 items as in comparison with 9,62,468 items in FY23.
- The long run demand outlook seems optimistic for business automobile trade, supported by sturdy macroeconomic situation, regular alternative demand for passenger automobiles, elevated concentrate on infrastructure tasks with greater price range allocations and bettering freight demand.
- As per Niti Aayog report by 2030, the Indian authorities is aiming for EV adoption to achieve 40% for buses, 30% for personal vehicles, 70% for business automobiles and 80% for 2W.
Alternatives in Motorbike Industries
The market share of >250cc bike has been steadily rising over the previous decade, from 2.5% in FY14 to eight.1% in FY24.
- Demand for premium merchandise is rising in India pushed by rising aspiration ranges and rising per capita revenue.
- International mid sized bike is underserved with a couple of globally operational manufacturers within the phase.
- Firms launches occasions and rides.
(C) Journey
(D) Board of Administrators
(E) Shareholding Sample
(F) Enterprise Classification
(i) Royal Enfield (RE)
Royal Enfield is a model which manufactures 2W mid weight(250cc to 750cc) premium phase bikes which has its presence from 1901. It presently operates in India and over 60 international locations with 5 subsidiaries around the globe. It has 88.2% market share in India’s mid dimension 250cc to 750cc mid dimension bike phase.
EML has Non-Motorbike enterprise which incorporates promoting Attire (women and men); protecting using attire, city informal put on, and using equipment.
(ii) VE Industrial Automobiles
VE Industrial Automobiles Ltd (VECV) is a JV between Eicher Motors Ltd and Volvo Group with a share of 54.4% and 45.6% respectively. In operation since July 2008, the corporate contains the entire vary of Eicher branded vehicles (Gentle, medium and heavy-duty automobiles) with GVW of 4.9-55T and buses (Seating capability of 12-72) underneath Skyline and Starline manufacturers.
VECV’s quantity elevated by 7.5% from FY’23 to FY’24, which is bigger than the trade progress. This improve in quantity resulted in improve in VECV’s market share from 16.9% in FY’23 to 17.5% in FY’24.
(G) Price Construction
(H) Financials
The corporate’s income has grown at a CAGR of 9.9% over the previous 9 years, rising from Rs 6173Cr in FY16 to Rs 16536 Cr in FY24. Subsequently, the corporate’s PAT has additionally proven progress, rising from Rs 1338 Cr in FY16 to Rs 4001 Cr. in FY24 at a CAGR of 9.03%.
(I) Administration Dialogue & Concall
- The corporate’s long-term aim is to ascertain itself as a worldwide premium bike model primarily based in India.
- The corporate is the best-selling bike model within the 250cc-750cc midsize market in India, Korea, and the UK, second in Thailand, and third in France, Italy, and Australia.
- Within the EV market, the corporate has quite a few concepts in superior levels of testing and intends to introduce its first EV product in 2025.
Non Motorbike Efficiency
- The corporate offers a pure using expertise that features rides, hassle-free possession, personalization, and handy and thorough bike upkeep and care.
- The corporate’s attire enterprise grew by 19.5% in FY2023-24 over the earlier yr.
American
- It has been the biggest market exterior of India by gross sales quantity over the past three fiscal years.
- Royal Enfield’s market share is roughly 7.8% in North America and seven.9% in Latin America.
Europe, Center East and Africa (EMEA) Market
- Firm gained No.1 place within the UK with 20.4% market share within the mid dimension bike phase.
- Moreover it’s the third largest participant within the mid dimension bikes phase in Europe.
Volvo Eicher Industrial Automobiles
- The corporate had its highest-ever annual gross sales of 85,560 items, representing a 7.5% achieve.
- Annual components gross sales reached a document of Rs 2118.46 crore, up 24% in comparison with FY23.
- It had a market share of ~10% in heavy responsibility automobiles and 35.8% in gentle and medium responsibility vehicles.
Q4FY24 Concall Highlights
- In the course of the yr, 912732 items have been bought, up from 834895 in FY23, representing a ~9% improve over the earlier yr.
- In the course of the quarter, the corporate obtained a very good response from each Indian prospects and world markets.
- The corporate’s excessive potential markets (with large potential over the subsequent 5-10 years) are Southeast Asia and Latin America.
- In the course of the yr, the corporate expands into Turkey. It has additionally established the fifth CKD (Fully Knocked Down) unit exterior India, in Nepal.
- The corporate will quickly launch a motorcycle on the 450cc platform.
- The ASP (Avg Promoting Worth) for the quarter elevated on account of the next combine of upper cc bikes.
(J) Strengths & Weaknesses
Strengths
1. Established and area of interest model positioning; continued management place in mid-weight premium sub-segment
Eicher Motors RE model has over 90% market share within the greater-than-250cc displacement sub-segment of bikes (home) and has maintained its management place for over a decade.
2. Increasing product vary and bettering technical functionality
Common new launches and product variations underpin EML’s technical prowess. With the launch of its ‘Himalayan’ (early 2016), ‘the twins’ (FY2019), ‘Meteor’ (FY2021),‘Hunter’ and Tremendous Meteor(FY2023) fashions, the corporate has demonstrated its functionality to develop new fashions from the bottom up, incorporating a brand new engine in addition to platform.
Weaknesses
1. Lack of phase diversification and rising competitors in premium phase
Eicher Motors product portfolio is concentrated in the250–750cc sub-segment, which caters to a distinct segment clientele. Regardless of YoY enchancment through the years, the sub-segment constitutes solely~8percentof the full 2W market in India.
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References: Annual Reviews, Information Publications, Investor Shows, Company Bulletins, Administration Discussions, Analyst Meets and Administration Interviews, Trade Publications.
Disclaimer: The report solely represents the non-public opinions and views of the creator. No a part of the report needs to be thought of a advice for getting/promoting any inventory. Thus, the report & references talked about are just for the data of the readers concerning the trade acknowledged.
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