Eicher Motors Q2FY18 Concall Summary



  • EML recorded best ever net quarterly income from operations at Rs. 2,167 crores in Q2FY18, which is a growth of 24% compared to Q2FY17
  • The unit sales of Royal Enfield are 202,744 motorcycles which is highest ever quarterly saleswhich has a growth rate of 22% over the same quarter last year
  • EML is selling around 5,000 units a month of the 500 CC franchise and is bigger than any other model of any other brand in above 250 CC
  • The order intake is well higher than the monthly dispatches and so, order book is strong


  • EBITDA was at Rs. 683 crores in Q2FY18, which is a growth of 26% over Q2FY17;
  • EBITDA margins are industry-leading at 31.5%in Q2FY18 and 30.9% in Q2FY17
  • There is a continuous engine on cost management, on value engineering, sourcing and so on and so forth
  • Net Profit for Q2FY18 was at Rs. 95 crores

New Products:

  • Interceptor and the Continental GT are the 2 new motorcycles unveiled by EML
  • These are powered by full new engine, full new chassis and been developed in U.K. Tech Center along with Chennai Tech Center
  • The new twins will absolutely augment these towards and should help EML significantly in itssteps towards achieving dominance inglobal mid-size motorcycles
  • It is expected that this will be an absolutely compelling upgrade for those who are looking for something bigger and more interesting
  • It's the same way that EML will be able to make a step up for people coming from 100 and 150 CC to 350 CC product
  • Also in other developing markets like Southeast Asia and Latin America, where the road speeds are slightly higher, this motorcycles should do approximately what the classic 350 did for India
  • In developed countries, where EML has a strong multi-brand distribution, this will be a very compelling offer with the characteristics of a very differentiated offer
  • Commercial launch of the new twins will start in April of 2018, and of course, increasingly over the course of 2018, will be available in different markets around the world
  • The Interceptor and the Continental GT are actually the same motorcyclebut they just have different trim
  • Procuring one same part for every single motorcycle and manufacturing the same thing for every single market will give a huge amount of consistency and ability to deliver
  • Capacity is not a constraint, but the ramp up will be very controlled
  • To capture selling season in Europe the launch is planned in Europe before India
  • The product cycle is over 40 months now, from start to delivery of products

Distribution Channels:

  •  In ASEAN region, EML launched its first store in Vietnam last month, and that's the fourth largest 2-wheeler market in the world
  • With two stores in Jakarta, and a new one in Bali, EML has total 3 stores in Indonesia
  • With 2 new stores; one in Austria, one in France, takes EML’s exclusive store count in international markets to now 30 stores
  • For 350 CC in the last 1.5 years or so, most of distribution has been biased towards going into the Tier C, Tier D kind of towns
  • The first obvious bike over there to be purchased is not a Classic 500 or a Bullet 500just because of the pricing difference between the two of them
  • Thunderbird, in its traditional markets, racers and bikers, who do not just commuting but also do slightly longer range riding
  • Those markets and that franchise is extremely intact in Bangalore, in Pune, in Hyderabad and so on and so forth
  • In each of U.K., Germany, France, Italy, Spain Royal Enfield has 40 to 60 multi brand outletsand 50 in U.S.
  • In classification D and E towns, the much smaller towns where Enfield  is adding dealers now,average number of sales at their standard level, is much lower than national average
  • Currently 2 to 3 dealers are getting added every week and is likely to continue

Service Side:

  • Currently EML has over 7,500 service base now across India
  • A lot of investment is being done on  parts andbackend systems
  • All the metrics like parts market share, parts availability, service market share, first time ridesare trending very good
  • This is reflecting in customer satisfaction in J.D. Power survey, where EML have been 1 in customer satisfaction

Rider community:

  • EML conducted a reunion ride at Columbia that went very well in market where it has been present only for around just over two years
  • There were total 120 riders riding along to Pereira from across Colombia
  • It had a huge amount of engagement with consumers and EML was able to reach a lot of intending purchases also through this kind of activity

Joint venture:

  • The commercial vehicles has grown well this quarter, which is a 17% growth at an overall level
  • The market share of VE commercial vehicles reduced from 13.6% to 13%, even though grown in volumes in the last quarter
  • In middle September, there was a price increase, but it was a very small price increase which was less than 1%
  • Sub-5-tonne:The market share in 4.9 tonne truck has increase from 21% last year to 23.4%
  • 5 tonne-15 tonne: EML lost a bit of share in heavy-duty this quarter also from 5% to 4.5% and gained some share in buses from 15% to 15.8% and in exports
  • Medium-duty engines:In Q2FY18, EML hassold over 9,000 units at an average of over 3,000 units a month as opposed to 2,000 units a month in Q2FY17
  • Eicher Polaris Private Limited had a steady performance in last quarter, but also entered into 2 new markets, which are Nepal and Bangladesh


  • The production target is 825,000 for this year and by the end of this financial year the target is going to be 75,000 units per month
  • Though the land is good in Vallam for Phase 2, it has not been triggered yet. From the day it gets triggered it takes more or less 12 months to complete the Phase 2
  • The trigger is, bookings, volumes, and other such metrics which are related to future sales potential

Waiting time:

  • There is a waiting for quite a few of models but the biggest one is still in Classic, which is 1.5-2 months in certain markets