Eicher Motors Q4 FY20 results: Key highlights of concall

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26 Aug, 2025 12:21

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Royal Enfield maker Eicher Motors on June 12 reported a 44.1 percent year-on-year decline in its Q4 FY20 consolidated profit due to nationwide lockdown in the second half of March and an overall slowdown in the auto business.

Profit declined to Rs 304.3 crore during the quarter, compared to Rs 544.8 crore in the same period last year.

Consolidated revenue from operations dropped 11.7 percent year-on-year to Rs 2,208.2 crore in the quarter ended March 2020 as Royal Enfield sales volumes fell 17 percent YoY to 1,63,083 motorcycles in the quarter.

Here are the highlights of Eicher Motors' Q4 FY20 earnings call compiled by Narnolia Financial Advisors:

Management Participants: Siddhartha Lal- MD, Vinod Dasari: CEO (Royal Enfield), Lalit Malik- COO (Royal Enfield), K. Arunachalam: CFO

According to the management of Eicher Motors, the overall demand environment will continue to be uncertain for the next couple of months. Royal Enfield will continue to be in the mid-size category for the next 5-7 years as the management does not see any drastic shift towards 1000cc motorcycles. The company gained 200bps market share in above 125cc space and its market share stands at 27 percent and 85-90 percent dealerships are opened.

Online enquiries have started to pick up in the last 2-3 months. The company increased prices by Rs 3,000 per motorcycle but it is not sufficient to pass on the full impact of BS-VI. There were Rs 50 odd crores of one-offs related to a) vehicle recalls due to faulty brake callipers and b) Foreign exchange fluctuation specifically related to Brazilian subsidiary. The plants are running at close to 40 percent utilization levels, the company said.

The management will continue to add studio stores in FY21 as well (expected to add 500-600 stores in FY21). The company has 600 studio stores as of March 31, 2020. Total touch points stand in India at 1,521 stores (921 dealerships and 600 studio stores). There will be product launches (Royal Enfield) every quarter for the next 3 years, they said. There has been a delay in 1Q FY21 launch due to COVID-19. However further launches are expected to be on schedule.

The product launches will be similar in India as well as overseas. There will be higher capex largely related to product and stores expansion in FY21, but thereafter there will be a sharp decline in capex from FY22 onwards as the majority of expenditure has already happened. The company added 35 stores and entered in 3 new geographies in FY20. The total store count stands at 77 and spread across 21 countries. The new geographies are South Korea, Italy and Belgium, they said.

The management does not see any meaningful demand in the commercial vehicle space in the near future. CV industry declined by 40 percent YoY in FY20. VECV revenue declined by 35 percent YoY to Rs 2101 crore. While EBITDA margin declined by 430bps QoQ to 1.8 percent in Q4 FY20. Market share in Heavy-duty segment stands at 5.9 percent whereas in Light and Medium duty segment stands at close to 30 percent.

Other Details

The board has approved the sub-division of equity shares from existing one equity share of the face value of Rs 10 each into ten equity shares of face value of Re 1 each.

Rationale behind the split: To facilitate a larger shareholder base and aide liquidity. Expected time of completion is 2-3 months after obtaining approval of shareholders, the management added.