🪞At a Glance
Eicher Motors – the proud parent of Royal Enfield and the co-parent of VECV – is no longer just a cool biker brand. It’s now a ₹1.5 lakh crore heavyweight that has revved up profits by 2.8x in 5 years. And while TVS and Bajaj flirt with electric, Eicher sticks to the old-school thump – and somehow, still wins.
🧠 TL;DR
| 🔍 Metric | 📈 Value FY25 | 🕰️ 5-Year Growth |
|---|---|---|
| Net Profit | ₹4,734 Cr | 182% ↑ |
| Revenue | ₹18,870 Cr | 83% ↑ |
| EBITDA (OP) | ₹4,712 Cr | 116% ↑ |
| ROCE | 30% | Consistently Strong |
| EPS | ₹172.69 | More than 2.8x |
| P/E | 32.3x | Slightly rich |
| Promoter Holding | 49.08% | Stable |
1️⃣ Royal Rebound: How Eicher Revved Past the Pandemic
- In FY20, Eicher was in second gear: slow sales, margin compression, and pre-COVID slowdown.
- Fast-forward to FY25: the company is at full throttle, posting a 25% EBITDA margin and record ₹4,734 Cr net profit.
- Royal Enfield alone sold 89,429 units in May 2025, up 26% YoY. Global demand? 82% up. Turns out, the “bullet” still flies in global markets.
2️⃣ The Profit Engine: Net Income Tripled (Almost)
- Net profit:
- FY20: ₹1,827 Cr
- FY25: ₹4,734 Cr
- 💥 That’s a 2.6x jump, thanks to stable OPMs (24–27%) and increasing other income (₹2,005 Cr in FY25 👀).
- The growth isn’t just operational – it’s also financial discipline:
- Zero-debt vibes ✅
- Cash from operations: ₹3,980 Cr in FY25
- Capex? Conservative and efficient.
3️⃣ But Wait… ₹2,005 Cr in “Other Income”? 🤔
- Yes, over 40% of PBT in FY25 came from other income.
- Likely from investments, dividends from VECV, or treasury gains.
- While it’s not shady, it does mean core operations aren’t the only engine powering those record numbers.
4️⃣ Motorcycle vs Commercial Vehicles: Dual Engines of Growth
- Royal Enfield = 70–75% of standalone revenue
- Middleweight bikes, global tours, brand cult.
- VECV = Eicher + Volvo JV
- Trucks and buses growing at 7.3% YoY (May 2025).
- VECV now contributes significantly to consolidated profits, but isn’t fully understood or valued separately by the market.
- Keep an eye on margin expansion in commercial vehicles.
5️⃣ Valuation Check: Is Eicher Overheating?
| 📊 Metric | Value |
|---|---|
| P/E | 32.3x |
| Price / Book | 7.18x |
| ROE | 24.1% |
| ROCE | 29.8% |
| Dividend Yield | 0.91% |
- Comparables:
- Hero MotoCorp: P/E ~19x, ROE ~23.7%
- TVS Motors: P/E ~63x, ROE ~28.9%
- Bajaj Auto: P/E ~32x, ROE ~22.8%
- ✅ Eicher trades at a premium, but not crazy, given brand strength, margins, and VECV optionality.
6️⃣ Shareholding & FII Mood: Slight Cooldown
- Promoter Holding stable at ~49%
- FII Holding: Peaked at 30.28% (Jun ’23), now down to 25.02%
- 🔻 Decline shows global funds booking profits after stock’s 3Y rally (25% CAGR).
- DIIs stepping in: Share up from 10% → 16.5% in past 2 years.
7️⃣ Fair Value Range 🔍
✨ EduInvesting FV Calculation (FY26E)
- Est. EPS FY26: ₹195
- Historical P/E range: 22–38x
- Median P/E: ~30x
🎯 FV Range = ₹4,290 to ₹7,410
Current Price: ₹5,576
➡️ Stock is priced in the middle of its fair value range – not cheap, not bubbly.
🧾 Final Verdict: Still Thumping, But Don’t Ignore the “Other Income” Muffler
Eicher Motors is the Apple of Indian motorcycles — premium pricing, loyal customer base, and minimal need for reinvention. But don’t ignore the noise from “Other Income” and global slowdown jitters.
If the core revs up like VECV’s engines and Royal Enfield’s export boom continues, this ride isn’t done.
✍️ Written by Prashant | 📅 June 26, 2025
Tags: Eicher Motors, Royal Enfield, VECV, Nifty50, Auto Stocks, Long Term Investing, Indian Midcaps, Motorcycles, Commercial Vehicles, EduInvesting 5-Year Recap
