Top Indian Companies: Eicher Motors Limited

Eicher Motors Limited is an Indian multinational automotive company that manufactures motorcycles and commercial vehicles, headquartered in New Delhi. Eicher is a Nifty50 company with a weightage of 0.47%.

Eicher is the parent company of Royal Enfield, a manufacturer of middleweight motorcycles.

Eicher Motors is a commercial vehicle manufacturer in India. The company's origins date back to 1948, when Goodearth Company was established for the distribution and service of imported tractors.

In 1959 the Eicher Tractor Corporation of India Private Ltd was established. Since 1965, Eicher in India has been completely owned by Indian shareholders.

In October 1982, a collaboration agreement with Mitsubishi for the manufacture of light commercial vehicles (LCVs) was signed in Tokyo.

In July 2008, EML and Volvo Group's 50:50 joint venture VE Commercial Vehicles (VECV) designs, manufactures and markets commercial vehicles, engineering components and provides engineering design.

At present, Volvo Group owns 45.6% of VECV, although there are 122 other institutional investors on record. In 2020 VECV bought Volvo Buses India operations for ₹100 crores.

Group structure

The Eicher Group has diversified business interests in design and development, manufacturing, and local and international marketing of trucks, buses, motorcycles, automotive gears, and components. Eicher has invested in the potential growth areas of management consultancy services, customised engineering, and maps and travel guides.

VE Commercial Vehicles (VECV) Limited is a joint venture between Volvo Group and Eicher Motors Limited (EML). VECV is divided into five business units: Eicher Trucks and Buses

• Volvo Trucks India

• Eicher Engineering Components

• VE Powertrain

Royal Enfield Motors, the motorcycle manufacturing subsidiary, is a part of Eicher Motors.

Vehicles

• Eicher Polaris Multix

• Eicher DragonHook

• Eicher Sleek

Shareholding Pattern

The Shareholding Pattern page of Eicher Motors Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 273411022 100%

Promoters 128467390 46.99%

Foreign Institutions 80517638 29.45%

Banks/Mutual Funds 16397746 6%

Central Govt 263670 0.1%

Others 7070739 2.59%

General Public 24384501 8.92%

FinanciaI nstitutions 10212458 3.74%

Foreign Promoter 6096880 2.23%

FY2023 Q4 ad full Year Results

Eicher Motors said its consolidated net profit increased by 49 per cent to Rs 906 crore for the fourth quarter ended March 31, 2023, on the back of robust sales across domestic and global markets.

The company, which had reported a net profit of Rs 610 crore a year ago, said it has earmarked Rs 1,000 crore capex this fiscal for its motorcycle business.

Total revenue from operations rose to Rs 3,804 crore for the fourth quarter as compared with Rs 3,193 crore in the year-ago period, Eicher Motors said in a regulatory filing.

During the fourth quarter, Royal Enfield, a part of Eicher Motors, recorded sales of 2,14,685 motorcycles, up 18 per cent, from 1,82,125 motorcycles sold during the same period in 2021-22.

For the year ended March 31, 2023, the company posted a consolidated net profit of Rs 2,914 crore as compared with Rs 1,677 crore in FY22.

Total revenue from operations for FY23 increased to Rs 14,442 crore as against Rs 10,298 crore in the 2021-22 fiscal.

Last fiscal, Royal Enfield registered the highest-ever motorcycle sales at 8,34,895 units, up 38 per cent from 6,02,268 units in FY22.

The company said it also crossed the 1 lakh export shipments milestone for the first time last fiscal.

Eicher said its board has approved a cash outlay of Rs 1,000 crore for 2023-24.

The capital would be utilised to set up an electric vehicle manufacturing facility and product development besides consolidating new product development under the internal combustion engine portfolio.

VE Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors, has lined up Rs 750 crore capex for the current fiscal.

"We saw overall stabilisation of supply chain, markets, and also the organization, and made significant progress on all important initiatives resulting in our best ever business and financial performance, both at Royal Enfield and VE Commercial Vehicles," Eicher Motors Managing Director Siddhartha Lal stated.

Going ahead, Eicher Motors is set for the next phase of growth, he added.

On the electric vehicle business, he noted that the company is focused on creating uniquely different electric bikes.

Lal said the company is building a capable team and forging supply chain tie-ups in the segment.

Royal Enfield has earmarked space at its existing plant near Chennai to roll out EVs.

Besides, it also has a land parcel near the plant for EV production.

"We are not giving out a timeline for the first EV product launch. What we can say is that we are working tirelessly and in a very focused manner," Lal said.

He said the company has crossed Rs 33,000 crore revenue mark in both Royal Enfield and VECV businesses, setting a very strong base for future growth.

Royal Enfield CEO B Govindarajan said the company would be launching a slew of new models over the next 18-24 months.

For the fourth quarter ended March 31, 2023, VECV recorded its highest-ever quarterly revenue from operations at Rs 6,200 crore, up 44 per cent from Rs 4,307 crore in the corresponding period of 2021-22 fiscal.

Profit after tax stood at Rs 319 crore as compared with Rs 99 crore in the same quarter of the previous financial year.

During the quarter, VECV recorded the highest-ever quarterly sales of 26,376 units, up 31 per cent from 20,093 units sold during the same period last year.

The company said its board has recommended a final dividend aggregating to Rs 1,011.88 crores at Rs 37 per share for the financial year ended March 31, 2023.

Shares of the company ended 0.25 per cent down at Rs 3,407.05 apiece on the BSE

Brokerage Outlook

Brokerage, Geojit expect volumes to pick up with receding Omicron effect and recovery in economic activities.

Persistent good performance of RE in international market, extensive distribution network, new product launches, high traction in all-new Classic 350, proactive engagement with suppliers to address supply chain bottlenecks and multiple management actions taken to optimize cost base augur well for the company’s performance in future.

With positive outlook, Brokerage upgrade their rating on the stock to BUY with a rolled forward TP of Rs. 3,122 based on SOTP valuation.

ESG

We are conscious of the impacts we have on the environment and on society and have undertaken a host of strategic initiatives to embed sustainability into our business.

In addition to focusing on local supply and reducing our upstream transportation emissions, we have gradually enhanced the share of parts that are received in green packaging, i.e. packaging made of recyclable, reusable and certified materials.

Contributing to the Sustainable Development Goals

Materials

Ð Less material consumption by reuse, recycling and use of renewable materials in production and packaging

Energy and Emissions

Ð Started operation of 999 kWp solar rooftop plant

Ð Undertaken various energy efficiency measures and saved 2,674 MWH in FY 19- 20

Ð High density plantations leading to additional green cover and carbon sequestration

Emissions Renewable energy, energy conservation and efficiency measures also contribute to lowering GHG emissions and mitigating climate change impacts.

Water and effluents

Ð Zero liquid discharge from the factories,

Ð Installation of rainwater harvesting system

Ð Water conservation measures at manufacturing facilities