This article first appeared on GuruFocus .
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Revenue:INR6,632 crores, a growth of 52% over INR5,042 crores from Q1 last year.
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EBITDA:INR1,591 crores, highest ever, compared to INR1,203 crores in Q1 last year.
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PAT (Profit After Tax):INR1,463 crores, up 21% from INR1,205 crores in Q1 last year.
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Royal Enfield Sales:3,32,940 motorcycles, up from 2,61,326 in Q1 of FY26.
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VECV Sales:24,815 units, a growth of 14.8% over last year.
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VECV Revenue:INR6,610 crores, compared to INR5,671 crores last year.
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VECV EBITDA:INR541 crores, compared to INR511 crores last year.
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VECV EBITDA Margin:8.4%, down from 9.2% last year.
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VECV PAT:INR300 crores, compared to INR288 crores last year.
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Release Date: July 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Eicher Motors Ltd ( BOM:505200 ) reported its highest ever Q1 revenue of INR6,632 crores, marking a 52% growth over the previous year.
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Royal Enfield registered its highest ever quarterly sales, with 3,32,940 motorcycles sold, indicating strong market demand.
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The company launched its first electric motorcycle, the Flying Flea C6, marking a significant milestone in its electric mobility strategy.
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VECV achieved a record sales of 24,815 units, reflecting a 14.8% growth and strengthening its leadership in light- and medium-duty trucks.
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Eicher Motors Ltd ( BOM:505200 ) announced a strategic expansion of its manufacturing capacity with a new greenfield facility, aiming to produce an additional 4.5 lakh motorcycles per year.
Negative Points
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Despite strong sales, the EBITDA margin for VECV decreased to 8.4% from 9.2% last year, indicating pressure on profitability.
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The company faced challenges such as LPG shortages and manpower issues, which required adjustments in operations.
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There was a significant impact from commodity cost inflation, affecting gross margins despite price hikes.
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The international markets, particularly in Europe and APAC, faced macroeconomic uncertainties, impacting sales growth.
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Inventory levels were low at about 10 to 12 days, which could pose challenges in meeting demand during the festive season.
Q & A Highlights
Q: Can you provide an update on the brownfield or module expansion and current production status, especially considering recent labor-related issues? A: Balakrishnan Govindarajan, Managing Director and CEO of Royal Enfield, explained that despite LPG shortages and manpower issues, production has been ramped up to 4,500 motorcycles per day, with a total of 1.16 lakh motorcycles produced in June. The current capacity is about 1.5 million motorcycles per year, with plans to increase to 2 million by FY27-28 and 2.45 million by 2029-30 through phased expansions.
Q: What are the key drivers behind the gross margin changes and other expenses in this quarter? A: An unidentified company representative noted that commodity costs increased by 4-4.5%, but were partially offset by a 1.7% price increase on 350 CC motorcycles. Other expenses were lower due to reduced marketing activities and the absence of certain launch costs, contributing to a 7% decrease in other expenses.
Q: How is the demand and customer profile for the new Flying Flea electric motorcycle? A: Balakrishnan Govindarajan stated that the Flying Flea C6 has been well-received, with over 100 units delivered in Bangalore. The average customer age is 25-30, and there is interest from existing Royal Enfield owners. The company plans a phased city-by-city expansion, starting with 10 locations in Bangalore.
Q: What is the outlook for international markets, particularly in Latin America and ASEAN regions? A: Balakrishnan Govindarajan highlighted strong growth in Brazil, where Royal Enfield is now the number two brand in the middleweight segment. In ASEAN, challenges persist due to quota restrictions in Indonesia, but plans for a CKD plant are underway to tap into this market. Thailand is showing signs of recovery, with Royal Enfield holding the number two position in the middleweight segment.
Q: How is Eicher Motors planning to manage inventory and production to meet festive season demand? A: Balakrishnan Govindarajan mentioned that the company is operating at full capacity with plans to increase production to 5,000 units per day. They are also working with suppliers to ensure 24/7 operations and are implementing direct billing to dealers to improve efficiency and reduce transit times.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
