Eicher Motors Q4 FY24 Concall: Key Updates on Capex, Revenue, Sales, Profit & Inventory

Day 31/100

Eicher Motors’ management provided insights into the company’s performance and future plans during the Q4 earnings call. The discussion covered capital expenditure (capex), revenue, sales, profitability, and inventory management. Below are the key highlights, along with direct statements from the concall.

1. Capital Expenditure (Capex) Plans

Eicher Motors is increasing its capital expenditure to enhance manufacturing capacity, invest in new technologies, and expand its dealer network. The management emphasized their commitment to premiumization and future growth, particularly in the electric vehicle (EV) segment.

Management Quote:
"We have planned a capex of around ₹1,000 crore for the upcoming year, which will be utilized for capacity expansion, new product development, and investments in EVs."

This highlights the company’s focus on long-term expansion and strengthening its product portfolio.

2. Revenue Growth

The company reported strong revenue growth, driven by higher demand for premium motorcycles and a steady commercial vehicle performance. New model launches, particularly the Himalayan 450 and Super Meteor 650, have contributed significantly to this growth.

Management Quote:
"We have seen a healthy revenue growth of 12% YoY, driven by strong demand for our new models. Our focus on premiumization is helping us expand our market share."

This suggests that customer interest in higher-end models is fueling revenue growth, along with a steady rise in export demand.

3. Sales Performance

Royal Enfield continues to witness strong domestic and international demand, with increasing traction in Europe and Latin America. The commercial vehicle segment, under VE Commercial Vehicles (VECV), also performed well, with higher fleet orders.

Management Quote:
"Our international business has seen double-digit growth, with strong momentum in the Americas and Europe. Domestically, our new models have been well received, leading to strong order bookings."

This indicates a global expansion strategy, as well as strong domestic demand, which is expected to sustain growth in the coming quarters.

4. Profitability & Margins

Eicher Motors maintained healthy profitability, supported by strong sales and operational efficiency. Margins remained stable despite cost pressures. The company is focusing on cost control and value-added products to sustain profitability.

Management Quote:
"Despite inflationary pressures, we have been able to maintain healthy margins through operational efficiencies and cost optimization efforts."

This implies that the company is managing rising costs effectively while maintaining a focus on premium products to protect its profitability.

5. Inventory & Supply Chain

Eicher Motors stated that inventory levels are well managed, but there are some challenges due to high demand for certain models, particularly the Himalayan 450, leading to longer waiting periods.

Management Quote:
"We are working closely with our suppliers to address the supply chain bottlenecks, especially for high-demand models like the Himalayan 450, where waiting periods have increased."

This suggests that demand is outpacing supply in some cases, requiring better production planning to meet customer expectations.

Conclusion

Eicher Motors is on a strong growth path, with increased capex, steady revenue growth, strong sales performance, and healthy profitability. The company is investing in future expansion and technology while managing inventory and supply challenges. With increasing global demand and premium product offerings, the outlook remains positive.