Yeah. Good evening, everyone.

On behalf of PhillipCapital (India), I welcome you all to Eicher Motors' Q4 and FY '26 earnings conference call. I take this opportunity to welcome the management team from Eicher Motors Limited.

Today, we have with us Mr. Siddhartha Lal, Executive Chairman, Eicher Motors Limited; Mr.

Vinod Aggarwal, Vice Chairman, EML and Chairman, VECV; Mr. B.

Govindarajan, MD of EML and CEO, Royal Enfield; Mr. B.

Srinivas, MD and CEO, VECV; and Ms. Vidhya Srinivasan, CFO.

Now I hand it over to the management for their opening remarks. Thank you, and over to you, sir.

Yes. Hello, everyone.

This is Siddhartha Lal here, and thank you very much for joining the Eicher Motors Limited earnings call for the quarter and financial year ended March 31st, 2026. We've had an absolutely stellar year this year at Eicher Motors with solid growth overall.

Both at Royal Enfield and VECV, we've delivered record-setting performances. While Royal Enfield achieved over 1.2 million motorcycle sales, VECV, for the first time, delivered a record 100,000 units, 1 lakh unit sales for the year.

The combined revenue of EML and VECV actually crossed 50,000 crores last year for the first time. On the back of this landmark year and our continued commitment to shareholder returns, the Board of Directors has recommended a final dividend of ₹82 per share for the fiscal year.

This year is also very special year for Royal Enfield as we celebrate 125 years of pure motorcycling, a philosophy that's held consistent across generations. Even though we're the oldest motorcycle manufacturer in continuous production, it feels like we're just getting started.

Making this year even more incredible was our entry into the electric space with the Flying Flea, which is our city plus electric mobility brand. In the first week of April 2026, we launched the Flying Flea C6 in Bengaluru.

The initial response has been very exciting. Even as we grow from strength to strength, marking new milestones in business and in financial performance, we remain focused on long-term growth.

Recently, we announced Royal Enfield's capacity expansion at our plant in Cheyyar, Tamil Nadu. From a longer-term perspective, we've also recently decided on plans for a greenfield facility in Andhra Pradesh.

Today, I would also like to welcome very warmly B. Srinivas to the call.

B. Srinivas.

In March 2026, he has assumed the role of Managing Director and CEO of VECV. He succeeds Vinod, Vinod Aggarwal, who was leading VECV for over 15 years.

Vinod has now taken over as the Chairman of VECV. Of course, he's also the Vice Chairman of EML.

As we step into this new year, we've also made a significant new announcement yesterday from an EML perspective, expanding on our highly successful 18-year partnership with Volvo Group. We now intend to set up a new joint venture with Volvo to enter into the vehicle financing business in India.

I'm going to hand over now to Mr. Vinod Aggarwal for more details on this new proposed joint venture on vehicle financing with Volvo.

Thank you very much, and over to you, Vinod.

Thank you, Siddhartha. Good evening, everyone.

Basically, our intent is to set up a 50-50 joint venture for financing, leasing, and other financial services business. Our investment in this will be up to 750 crores for the 50% stake in this Volvo Financial Services India.

Volvo Financial Services India is in operation here in India for last more than 10 years, and they have assets under management of 1,806 crores. They will issue fresh equity stake from the company, this money will be put into the company, into VFS India.

This JV combines Volvo's global financial services expertise and Eicher's local knowledge and network. This JV will serve Eicher, Volvo, and Royal Enfield customers in India, and it presents an opportunity for EML to operate in an important segment of the value chain, using financing as a lever for a superior customer experience.

The proposed JV will be the captive financing arm for VECV, EML, and Volvo Group products in India. The JV will combine VFS strength and understanding in the financial services with Eicher's extensive product portfolio, network, and deep market understanding to capture new business in a more aligned and efficient manner.

The proposed JV will also deepen integration to accelerate decision-making and help customers in easily accessing financing solutions. Now I hand over back to Govind for briefing on Royal Enfield.

Thank you, Vinod. Good evening, everyone.

Let me just talk to you about the Eicher Motors Limited financials and performance. It's been an another strong year for Eicher Motors, and a particularly special one for Royal Enfield as we celebrate 125 years of pure motorcycling.

Our results have been reflective of the strategic actions we took. We are by no means resting on these achievements.

In fact, we are gearing up to the next phase of growth, as you have seen through some of our recent announcements. Now let me start with the numbers for the fourth quarter.

Eicher Motors Limited posted a record performance with the consolidated revenue at 6,080 crores, and EBITDA at about 1,514 crores. Profit after tax stood at about 1,520 crores.

Not just the past quarter, as stated earlier, we maintained a solid growth momentum through the full financial year as well, with revenue growing to 23,408 crores, with an EBITDA of 5,785 crores. PAT for the period stood at 5,515 crores.

Coming to some of the key updates from Royal Enfield. This has been our strongest year yet.

What makes it even more special is we achieved many important milestones in Royal Enfield's 125th year. We continue to consolidate our leadership in the mid-size motorcycle segment as our motorcycles continue to perform well through the fourth quarter and across the financial year.

For the full financial year, we recorded our highest-ever annual sales performance with 12.27 lakh motorcycles sold, making this our second consecutive year of crossing 1 million motorcycles. Domestic sales grew 23% to 1.1 million units, while international volumes also grew 20% to 120,634 units, reflecting the growing strength of our international business, too.

We're also witnessing the strongest festive season in in our history as of the second year, with the sales growing in the last festive time at 26% over the last year. Happy to share that at 125 years, today, 1 out of every 3 customers of Royal Enfield is below the age of 25.

Now on the product front, this year was marked by thoughtful upgrades across our portfolio shaped by our community. We introduced the 2026 Guerrilla 450 Apex, a sharper and more focused version of an already existing motorcycle on the Guerrilla platform, which has received a tremendous response.

The 2025 Hunter 350, Meteor 350, Goan Classic 350, and the Himalayan Mana Black, which all got launched, also saw meaningful upgrades, and they have brought overall volume gain for us. Some of our key motorcycles also achieved important milestone during this year.

The Meteor 350 crossed the 6 lakh sales mark since its launch in 2020 on a cumulative basis. The Himalayan 450 recorded its strongest, registering a 53% growth to achieve over 38,000 retails across the global.

To make our entire 350 range more accessible, we also announced partnership with Flipkart and Amazon in India. We are working on it further.

We ended the year by starting a new journey with the launch of Flying Flea C6, as Siddhartha mentioned, alongside opening of our first Flying Flea store in Bangalore in April 2026. The feedback on the FF C6 has been incredible, and we are taking a deliberate city-by-city approach.

Beyond India, we continue to deepen our global footprints. In Latin America, Brazil led the way with about 71% growth during the year.

Brazil is now our largest and fastest-growing international market, second only to India in our overall global footprint. Closer to home, in SAARC, Nepal outperformed this with a spectacular growth this year driven by new launches such as Classic 350 and Hunter 350.

Our allied businesses had a very strong year across board. Our apparel business continued to grow and saw a 21% growth compared to the previous year, with the launch of new collections like Conscious Collections, Guerrilla Streets, and Royal Enfield X Moto Aviators.

We also expanded our collectibles portfolio. Genuine motorcycle accessories has seen an exponential growth with global revenue growing by 32% over the previous year, while our spare parts business also recorded a robust 18% year-on-year growth.

Beyond motorcycles, our community grew stronger than ever during this year. Motoverse 2025 concluded in Goa with another unforgettable edition, with a 30% higher footfalls, brought together riders, creators, musicians, artists, and explorers from around the world in a celebration for a pure motorcycling.

We introduced two new community-centric properties: Hunterhood and Gurrilla Nights, across multiple cities that helped us connect with the younger and a more diverse set of riders. The 14th edition of One Ride brought together more than about 40,000 riders across 66 countries, reflecting the strength of global Royal Enfield community.

During this quarter, we also got J.D. Power ranked as highest in the overall two-wheeler Initial Quality, a direct reflection of our focus on the customer satisfaction.

We have secured the number 1 position in Federation of Automobile Dealers Associations (FADA) Dealer Satisfaction Survey, and we ranked number 3 in the world's strongest automobile brand in the Brand Finance Automotive Industry 2026 report. On the sustainability, our Oragadam facility was recognized as Sustainable Factory of the Year by Frost & Sullivan, an affirmation that our commitment to the responsible manufacturing.

The second edition of Journey Across the Himalayas brought together over 11,000-plus visitors, a reflection of how our social mission is growing. On manufacturing and back-end and future readiness, in February, we announced a 958 crore brownfield expansion at our Cheyyar facility in Tamil Nadu to further strengthen our manufacturing capacity.

This will take us our annual capacity to almost 2 million units in phases. In addition, earlier this week, we have also announced our strategic expansion plan in Andhra Pradesh, which will help us to build future-ready capacity and support our long-term growth.

As you heard, we have exciting updates and action across board, and we are geared for the growth-led FY '27. With this, now I'll hand it over to B.

Srinivas to walk us through the VECV performance. Over to you, Srinivas.

Thank you, BG sir, and good evening, everyone. The year FY '26 was a landmark year for VECV.

We delivered a record 103,404 units, growing almost 15% over last year. Importantly, this performance was broad-based and reflected the increasing strength of our business across all verticals.

In Eicher brand heavy-duty trucks, we delivered 25,155 units during the year, registering 14.1% growth and improving market share to 9.1%. In LMD trucks, we strengthened our leadership with 47,789 units, while reminding ourselves that market leadership must always be accompanied by a profitable growth.

Our entry into the new SCV segment has begun well with 2,452 Pro X trucks delivered, including 726 EVs, opening up an important new avenue for growth. Eicher Buses delivered 18,651 units.

Our Volvo Buses reached a record 712 units, and Volvo Trucks closed the year at 1,712 units. Exports grew strongly by 35.6% to 7,024 units despite a challenging external environment.

Our spare parts sales grew 13.9% to 3,045.5 crores. These numbers show that VECV's growth story is not limited to one segment or one business line.

Let me begin with the fourth quarter performance. VECV posted a record performance with consolidated revenue at 8,280.6 crores, EBITDA at 921.5 crores.

Profit after tax stood at 595.8 crores. Beyond this quarter, we sustained a steady growth trajectory across the full year, revenue growing to 27,076.6 crores with EBITDA of 2,562.6 crores.

PAT for the year stood at 1,471 crores. At VECV, we continue to develop our sustainability and inclusion journey throughout the year FY '26.

Beyond the numbers, the newly launched Eicher Pro X is assembled on an all-women line, SCV industry-first in India. We strengthened renewable energy adoption through a 4.5 megawatt rooftop solar project, which is expected to reduce emissions by 25%.

We also cycled 52 million liters of water at Bhopal plant through an artificial lake that supports local birds and fish. Our carbon offset efforts continued with plantation of 66,000 trees, which is expected to offset about 660 tons of carbon emissions.

VECV continued to get good recognitions. At 17th Apollo CV Awards, VECV was recognized as CV Maker of the Year and Transport Solution Provider of the Year.

Our newest offer, the Eicher Pro X, was honored as Debutant of the Year. These recognitions reinforce our commitment to lead our vision to drive modernization in commercial transport.

VECV is entering this new financial year from a position of strength. As we look ahead, the environment around us remains dynamic.

Global uncertainties, geopolitical developments, and supply chain volatility will continue to test our agility. India's long-term growth drivers remain strong.

Infrastructure creation, logistics modernization, growing e-commerce, and the push towards cleaner and more efficient mobility continue to create a meaningful opportunities for us.

Thank you, Srinivas. It has indeed been an excellent FY '26 for Eicher Motors Limited, and we are happy to have started FY '27 on a very strong note with a good momentum in April 2026, with a growth of 31%.

The resilience of our growth over the past 8 quarters makes us confident that our strategies are steering us in the right direction, and over the medium term, we expect the trajectory to be upwards. In line with this projected growth, we are preparing to be future-ready with strategic manufacturing expansions and market-relevant products planning, both at Eicher Motor at Royal Enfield and at VECV level.

Finally, as Sid mentioned earlier, we are getting into a new business vertical with a proven trusted partner and expect this sound investment to create value in the long term. Thank you all for being with us on this call today.

Now we can move to question and answers.

Yeah. Thanks a lot for the opportunity.

Am I audible?

Yeah. Congratulations to the team for a great performance, and congratulations to Vinod ji for leading the growth of VECV for almost a decade now as a leader.

Congratulations to Mr. Srinivas as well for the new role, and look forward to interacting with you soon, sir.

Moving on to the questions. Govind, need your help on your take on the demand for the premium motorcycles in India.

One of your peers actually called out premium motorcycle as probably the strongest segment right now in terms of growth, despite the geopolitical and macro what we are seeing. If you can just share your broad thoughts as to given where demand is and given where inventory levels are in industry, how do you expect the retail growth to pan out in FY '27 for the premium motorcycle category?

Also then share your plans on the capacity expansion what you're talking about, because what we understand looking at VAHAN and also talking to dealers is that you are literally running on zip in inventories. Right?

If you can just help us understand the growth outlook for the category and your plans for the capacity to begin with.

Pramod. Three questions which you have asked.

First is about the premium category growth. Financial year '26, we sold almost about 1.11 million motorcycles in India.

There was a solid growth of about 23% over the last financial year. In the month of April 2026, we sold about 1.04 lakh motorcycles, which is actually a 37% growth over the last year.

Structurally, I am seeing the demand is continuing. Inquiry levels are growing almost about 23% compared to the previous years and the months.

There is no structural correction which is taking place in the demand. That's continuing.

Inquiries are very good. Booking rates are very good.

As you rightly mentioned, currently, Royal Enfield, the inventory levels are almost about 7, 8 days, primarily because in the month of May, there are issues on the manpower availability due to elections and LPG shortages. Those are all the issues which are there.

That is a temporary, about a week to 10 days phenomena. That is now back on track.

The deliveries are starting now, you will see the growth continuing on the overall level. As far as the capacity is concerned, we mentioned our capacity is about 1.4 million with about 500 module, which we explained to you people in the last call also.

That's going to kick in from June end, July. It does mean the overall capacity will go up to almost about 1.6 plus.

The 958 crores CapEx, which we also got it cleared, that will kick in for the overall capacity of 2 million. This all will happen, as Siddhartha also mentioned and as I was explaining, at our Cheyyar facility where we have land, so that's a brownfield expansion.

That's about 2 million capacity, which will be there by Q2 of FY '28. Beyond, because we are bullish about the growth, as you also mentioned, premium category segment is growing.

We have all our products which are doing outstandingly well, including the Guerrilla Apex, which we have launched now. We are also signed up with Andhra Pradesh government for the greenfield project that's kicking in over and above 2 million capacity.

That's where our capacity planning is being done now.

Govind, I think to quantify the growth possibility for the premium segment motorcycles, is it fair to assume, given the commentary, that there could be strong double-digit growth for the premium category for FY '27?

Premiumization in India is continuing as a trend. Of all the motorcycles total, only the premium segment is growing.

That's why I said inquiries are continuing. The trend of premium motorcycles will grow.

If I have to give you some references, Pramod, the entire premium motorcycle in 2022-2023, the market size was only almost about 70,000. Now it has gone to almost about 1.1 lakh per month.

In that, that time to now, in the 1.1 lakh, we are almost about 90,000-plus. The entire premium motorcycle segment grew, and Royal Enfield outgrew that.

That momentum is continuing as of now. That's why I said structurally we don't see any changes in the whole premiumization and the premium motorcycles growth.

The inventory of 1 week is including transit inventory, right?

No, it is a dealer inventory and the depot inventory. Transit is extra.

Depot inventory. Depot inventory sits on your books, right, not with the dealer?

Yes.

Okay. Dealer inventory will be even lower than 7 days, effectively.

That's right,

that's right.

Yeah. Can I squeeze in a question on margins?

Is it possible or

Go ahead.

Yeah. On the next big debate is the margins and the cost, sir.

As in your margin execution this quarter has been pretty good. I think you managed the commodity inflation very well.

If you can just help us understand between you and Vidhya as to how much was the commodity impact in 4Q, how much of that you could pass on to the consumers in 4Q, and what is the pricing taken up in 1Q, if any? How should one look at commodity as a headwind to your margin profile?

If you can just help us explain your pricing position and all the activities what you're taking to kind of mediate Just help us understand that, please.

Vidhya, maybe you can cover the Q4

Yeah. I'll talk about Q4.

I think as you said, we've been able to largely mitigate the margin impact as far as Q4 is concerned. Overall, because of the increasing commodity cost, we had a total impact of about 90 basis points in the quarter.

We took a price increase in January, and the blended price increase was about 70 basis points. Remaining 20 basis points, we were able to address it through value engineering, cost reduction, as well as marginal price variant mix.

That's how Q4 panned out. Then I'll hand it over to BG to talk about the larger direction.

You all know the operating environment as of now, the entire auto industry is pretty complex because of the war situation. One is about the inflation increase which is taking place.

The second is also availability itself is becoming a bit of a problem. We are all trying to do it on a war-footing basis like how do we run the continuity in production.

As far as the commodity is concerned, yes, there is a huge headwind. If I have to give you some number, it is almost about 3% to 3.5% on the material cost level impact is expected.

What we have done, anticipating this and started working on, first is before the price increase, we intensified our value engineering. We intensified our cost reduction exercises, some of the austerity measures, because it's a war situation, we also had to be prepared for it.

We also did a pricing increase of about 1.75% in the month of April. We are at it.

We know it is not that the entire commodity inflation is actually covered up. How do we minimize, how do we mitigate this?

We may have to navigate the entire situation carefully, but we are on top of it, and we are confident that we will mitigate it to a maximum extent.

Govind, just to clarify, this 350 bps is incremental, or this includes the 90 bps what happened in 4Q?

It is incremental in Q1.

You have taken a price increase of 1.75%, under-recovery is 1.75% or thereabout.

Yes, if you have to do a straight equation, 3% to 3.5% level, yes, 50% is actually recovered. Remaining 50% is what I had mentioned: A, we have to do some austerity measures which are required here and now; B, value engineering and kick in slightly ahead.

We would have planned some projects which will be kicking in by July, August. That has to happen so the front-ending of cost reduction has to take place.

We also had done some of pre-buy, which is also helping us. The residual inventories which will also be used.

All the levers of the supply chains are being pulled because it's a tighter situation which we have to navigate, and we are on top of it now.

Operating leverage benefits will be

No, just a clarification on operating leverage. Just operating leverage benefits will be over and above this, right, whatever mitigating factors from operating leverage?

Yes. [laughter]

Yeah. That puts you in a much better position, Govind, as a company.

Thanks a lot. I will fall back in the queue.

Fine.

Yeah. Good evening, sir.

Congratulations on a strong performance. Just on the demand follow-up, any outlook you would like to share for FY '27, what range you are expecting growth for the industry or for Royal Enfield, any thoughts there?

Also, similarly, for the export market.

Kapil, we don't normally talk about the forward guidance in numbers. Currently, as I mentioned, in the month of April, we actually grew by almost 31%.

As I also mentioned that the demand is very strong. In fact, the demand growth which I'm seeing is almost about 23%-plus level.

Booking is continuing. The interest on Royal Enfield is very good.

All our launches have done outstandingly well. Very recently, we launched our Guerrilla on Apex variant.

That has really given us some good amount of an inquiry and booking. If I have to tell you on an overall level, there is no structurally any changes which is taking place.

We are working on fulfilling that demand. Because we had some setbacks because of the elections, manpower availability, LPG availability, commodity availability, power issues, those are all the areas which we are working on top of it, and we are now working on demand fulfillment.

That's about the overall demand situation, Kapil.

Sir, about the international market?

International market, our Brazil is doing outstandingly well. In fact, last year, we grew by almost 71% compared to the previous year.

In Brazil, we have become the number 2 in the middleweight. Our product Guerrilla 450 has won the Motorcycle of the Year, Himalayan 450 won the Trail Bike of the Year, Bear 650 launched and delivered in the month of March.

Overall, in the Latin America and Brazil, we have been doing outstandingly well. In fact, we are now focusing Brazil as an next big market to India.

Currently, what is happening in the macro, most of the markets, especially United States, you all know, and there are tariff issues, confusions which are all getting settled, but that's only about a 3% of the total market for us. Europe continued to degrow.

In the degrowing market, we are maintaining our market share. I must tell you, in Europe, I call it as market adjustment year.

There are degrowth which is taking place. Pre-registered vehicle of OBD-2B, which was there, still, because of the degrowth, those pre-registered vehicles are not cleared off from the floor.

As a result, fresh billing is taking time. International market, we are cautiously optimistic as of now.

Okay. Sir, on the financing JV that we have done, what should be the primary benefit we should expect from that?

Do you think it has market share implications for VECV and Royal Enfield, or will it be more about tapping the profit pool in that segment?

Fundamentally, financing is important part of the value chain. Therefore, apart from being the important sales tool in some of the markets where financing may not be available, this is a separate business altogether.

This will be run absolutely independently, and all the decisions will be taken based on their risk profile and based on the actual financing modules. At the same time, as you ask that whether the market share will go up, that it will definitely help in getting better financing, like it will also get help in getting more innovative products because Volvo Financial Services, they are a very very large financing arm of Volvo Group, and they have a lot of innovative ideas how do we create more customer satisfaction.

I think they will bring in all those products internationally, and other good thing is that the VFS, they do only captive financing. They will do only the VECV or Volvo products or Royal Enfield at a later date.

Therefore, I think it's a good I would say good business opportunity, and at the same time also as a sales aid. That's it.

Yeah.

Okay. Thank you very much.

Congratulations, sir, on stellar numbers. Firstly, in last EICMA show, many products were showcased.

Can you talk a bit about the upcoming products? I think Bullet 650, Flying Flea S6, some thoughts on where you are focusing on and, if possible, some timelines?

New products have to be spoken when the new products is really coming on to the market, Raghu. [laughter] But all this products will, whatever we have talked about or what we have showed in EICMA, they from a project timeline perspective, whatever we intend to bring it to the market, it is on track.

There is no delay. I'm happy to share with you one thing, as you all had seen, our electric mobility products, which is Flying Flea.

During this quarter, we actually launched, and it's a city-plus motorcycle, which won the Red Dot Award even before it was launched. We have launched the product.

Now booking is just started. We had gone into Bangalore only in one store.

Slowly, we are building up because we know we are not in a rush, but because it's a product which everybody loves now. We did a media ride, and all the journalists really, really loved the motorcycle.

There is a very good review we got. We are building the category, so that product has already come in the market.

You will see S6, which was shown in EICMA, that will also come in. Our Bullet 650 is on the cards.

It's just going to come, because that I can share it with you, because the dispatch has already started. Remaining products, you will see one by one which will come into the market.

Noted, sir. Wishing all the best.

One clarification: you said capacity near term June, July will increase to 1.6 million, and all the production or/supply constraint, labor shortage, all that is behind. Is that understanding correct, sir?

That's right, Raghu. Our capacity declared was about 1.4, and we said with a 500 module, which we started off anticipating the growth, that's going to kick in from July, because we had to be prepared for festive season.

With that, our capacity will go to almost about 1.6 million. The investment which was also cleared, 958 crores in April, that has started, and that will take us the overall capacity in phases to 2 million.

For future, because the growth momentum is continuing, we also have to secure land. That's why we signed up for a greenfield project at Andhra Pradesh.

That was

very helpful, sir. Just a last question.

Welcoming Mr. Srinivas and best wishes.

Sir, can you talk about MHCV industry growth, how are you seeing for FY '27? Also, if you can indicate your thoughts on the commodity pressures for Q1.

I'll start from the latest one. I think the commodity pressure is exactly same as what Govind has mentioned.

I think we are sailing the same boat. It is expected to be in the range of 3% to 3% to 3.5%.

That's in the first quarter. That continued to be in the similar lines for the year.

As far as the demand is concerned, I think there is no forecast expected at this moment. However, right now, the traction in the market is quite good.

Noted, sir. Thank you very much.

I'll fall back to the queue.

Hi. Good evening, sir.

First on the model pipeline, you have a broader segment, and you've shared about the Bullet 650. Is it possible to share if there are plans right now or once the capacity expands to go below the 350cc segment?

Arvind, as a company, we always say less is more, and our focus has been always 250cc to 750cc. That's the middleweight.

That's where we will play. Currently, we have our J-series, which is a 350cc; we have Sherpa platform, which is a 450cc; and a 650cc.

These are all the platforms which are established, and we have products on the 350cc, which are Bullet, Classic, Hunter, Meteor, Goan Classic; and in the 450cc, we have Himalayan, Guerrilla, and Scram, and now the Apex variant, which also got launched; and in 650cc, we have Continental GT, Interceptor, Super Meteor, Shotgun, Bear, Classic 650, and the Bullet 650 is going to come. We have a product pipeline in a very good level.

Every product of ours which we have launched is with a purpose which we have always built, and the consumers were really enjoying it. We always look for adjacencies, what sort of an experience which we can give it to the customers.

Our belief is the platform which we have already launched, 350, 450, and 650cc, itself has a very good potential to grow. Our focus will be more on that.

As we mentioned, as an organization, our focus is on the middleweight between 250cc to 750cc.

Thank you so much for this. Sir, staying on the models, with the Flying Flea, you said it's very, very early.

Are there any aspirational monthly numbers or any sort of a figure that you believe you've penciled in for the year?

Look, I think it's a very different product. People are really liking it.

Anyone who looked at the product and test-ridden the product, they really said that Royal Enfield way of doing an electric, which is a Flying Flea, endorsed by us, and that's got accepted as a product. It's a new category.

We have to develop, not in an urgency of doing that. That's why we have chosen city-by-city approach.

We have gone to only one store at this level. If I have to tell you in one store, how is that?

Test rides, inquiries are very good. We are very happy about it.

We'll actually go city by city slowly, and we will build this.

Got it, sir. Thank you so much.

Just one clarification. I'm sorry, it's been asked twice already, but from 1.4 to 1.6, you said something about a 500 module.

Could you clarify, sir, what exactly is this?

That's a per day module of all the manufacturing facilities. Maybe you should have clarified it's about a per day module.

Yeah.

Per day module. Okay.

Okay. So 1.4 to 1.6 is more of a brownfield debottlenecking sort of a thing.

That's right.

All right. Thank you so much for clarifying it, sir.

Thank you so much. That's all from my side.

Thank you, Arvind.

Yeah. Hi.

Thanks for taking my question. This is with regard to the vehicle finance JV.

Wanted to know, in the past also, you might have evaluated to enter this segment. What prevented then, and now do you see with your portfolio getting expanded into EVs and much wider, you feel the need for vehicle finance?

Or you feel the environment is now better with digitalization? What is the reason to enter now versus historically you might have evaluated?

I think earlier, we had never seriously evaluated entering this business. This is the first time.

Of course, this is in collaboration with Volvo Group, where we have already very, very successful partnership. Looking at their success in this financing business worldwide, I think that was one factor that if we are able to collaborate in this area, this could be another good opportunity for creating a very successful joint venture.

That is the objective. Then, of course, it's also a good new business line, and at the same time, it will help us also to increase our sales or provide more products for our sales teams.

Thanks, sir. What's the medium-term capital infusion plan?

Initially, you said you will invest X amount, but if you have to look at, it's a capital-hungry business. Free to find.

I agree, but if you look at their current profile of 1 year, we are now going to put up to 750 crores into the balance sheet. They already have a net worth of around 500 crores, and their current debt equity is only around 3.

With 750 crore up to 750 crores additional and existing network, and in this finance companies, you can go up to debt equity of 5:1. I think we are adequately capitalized for the medium term.

Then, of course, we are not in a hurry to grow the business very fast. We will adopt a very slow and steady, step-by-step approach.

We have to make sure that we have proper systems in place, proper risk management mechanisms in place, and, of course, there is no hurry that we have to bring it up to a very fast pace, so that we have to keep on putting in more and more money. We have to I think bring it up to speed.

Like current assets under management are only around 1,800 crores. With the up to 750 crores plus another 500 crores with the net worth, if you say around 1,200, 1,250 crores, and we can go up to 5 times more or 6 times more, and then profits over next 3, 4 years, I think there will be opportunity to grow the assets under management with the current infusion of money, maybe up to 9,000, 10,000 crores over a period of next 5 years.

I think if we are able to do that, that will be a good beginning. Therefore, we don't think that we will be required to put in any additional money at least for the next 5 years.

Sure, sir. Thanks a lot, and all the best.

Hey. Hi.

Thank you for taking my question. This is Kumar Rakesh from BNP Paribas.

My first question was around clarification for the greenfield plant which we are starting to work on. Any timeline on that and what kind of capacity is going to come up?

Because 1.6 million capacity, assuming that you grow at double digit for the next couple of years, will start getting exhausted by fiscal '28 end. A plant typically takes about 18 months to ramp up at least.

It should have already gotten started, and some timeline on that would be helpful for us to get some comfort around FY '29 capacity situation. Look,

I think you stopped at 1.6 million capacity addition, because that is only with a 500 module per day which we are just clarifying. The additional 958 crores, which we are putting in as a capital for taking the capacity from 1.6 to almost 2 million at our Cheyyar facility, which is a brownfield expansion, that we are looking at Q2 FY '28.

As you said, if the growth continues, then we need for future. For future, as a team, we evaluated, where do we have the further expansion?

Which way it will be logistically better? That's where we narrowed down on AP, and we got about 261 acres of land where we will actually be looking at further expansions, that's for the future, beyond 2 million capacity.

Right. We haven't shared any timeline of that greenfield capacity and what the first phase capacity would be?

No,

look, we just signed last week acquiring the land. Land has to come into our side.

There is a business case which we have to make. Why is it like this?

We know we are a growing organization. We have to be prepared for growth.

That's why we have been front-ending the investments and going in the capacity expansions. The longest lead time is always of having a land parcel in hand.

At some point of time, that may become a major bottleneck. That's what is the first thing which we have to secure.

That's why today in the brownfield project, Cheyyar we are doing, because we had about 65 acres in our hand. That's why we could able to come up to the GST period increases and suddenly what decision which we can take, and where do we invest.

Similarly, now we have to have a land parcel. That's why we have signed up with an Andhra Pradesh government to have a 261 acres for our future growth.

Just into the signing of MOU, we will have the land. Typically, it will be somewhere around 24 to 30 months window.

That's where we will come out with the new plant fully operational.

Thanks a lot. That's quite reassuring on the capacity planning side.

If you could similarly give some reassurance on the product planning side, that you see there is any particular whitespace or sub-segment where a product can significantly increase volume and hence justifies the kind of capacity addition that we are looking at? Or do you think that the incremental increase on the existing J platform or the existing products variants can keep on driving outperformance over the industry volume growth?

Essentially, what I'm trying to understand is that do you see there is a large whitespace still left in which you can launch a model and expand your volume, or this is going to be more incremental just tweaking the existing portfolio?

We have a really diverse yet very focused differentiated experience products, and that is what is our 350cc, 450cc, and 650cc platforms. Just to give you an example how things have changed, Hunter 350, when we launched, we wanted that it should give us an incremental volume.

That should give us a growth. We launched it, and it was actually adding volume to us.

Once that has come to a particular level, we thought now urban is fine, now we have to go into the rural areas. We opened it in the rural area, that gave us volume.

Now next phase is it still has a lot of potential to grow at a very accessible price point, including the GST impact which has helped us for a Hunter. We have created a platform called Hunterhood where we celebrate the street culture, and thereby, we are actually getting young audience to the platform.

Similarly, for the Guerrilla, Guerrilla Nights, which we are doing it, it is actually helping. This is the 125th year celebration of Royal Enfield.

You will see a lot more activities which we will be doing on the brand building and a mother brand level. With all our products and the products which are there in the pipeline, we strongly believe the growth momentum will continue because premiumization is continuing, premium motorcycle as a segment is continuing, and we have gorgeous-looking products with a diverse product lineup which are there.

That's the confidence we have that it will continue. We'll always be looking at, as I mentioned, in the middleweight, is there a whitespace which comes up?

In that area, what is that we have to do? Because we constantly ride with the community, and we get what exactly the community wants.

Is there a whitespace emerging out of that, that we'll work on. We do see our Flying Flea also will create quite a good volume for us.

We are not taking that route of just opening more and more, because we have to build that slowly. That's what we are doing in an electric space.

Thanks a lot for answering my questions.

Hi, sir. Thank you for the opportunity.

Could you provide an update on VECV's positioning in the electric bus segment and current market share, and how do you see the opportunity evolving over next 3 to 5 years?

VECV is actually preparing for the EV space, particularly in buses. We are there in the 9-meter, we are there in 12-meter, we are there in 13.5-meter buses.

It covers a large spectrum of buses which are required both public and the private segments. We go by the current order book or current demand.

We have a reasonably good order book with us right now. We are strengthening our portfolio further.

I'm very confident, and we have been competing for various orders which are emerging in this space. That will further strengthen our position in electric vehicles.

Sir. Thank you.

The next question is for Royal Enfield, basically. How do you see demand mix evolving between urban and rural market in FY '27?

Additionally, could a below-normal monsoon impact rural sentiment and demand growth for this year?

Look, as I mentioned, our growth momentum is stronger. In fact, in the month of April, we grew by almost about 31%.

That's what I mentioned. If I have to tell you about top 10 cities, in top 10 cities, we have grown almost about 24%-plus.

Even in the rural market, the growth is continuing. I don't think now urban or rural, is there a shift which is taking place?

Even with the income tax saving which came up, urban market, which has not been growing for quite some time, even urban market also started showing growth. Rural market growth is the story of India, that's continuing, and we are also growing in that.

Also, what's the role the replacement demand has played over the year, and is current demand momentum more driven by the first-time buyers or replacement demand?

First-time buyers are going up. In fact, as I mentioned, 30% of our consumers are below the age group of 25.

The first-time buyers percentage is also going up, thanks to all the GST, the price reductions which has also helped in getting a lot more people who are aspiring to own a Royal Enfield to take a decision of converting as our customers. On the replacement cycle, as I mentioned, which is yet to kick in, but in the last year, if I have to tell you, we have gone to almost about 400 cities, about 710 dealership.

We have created a digital platform. The traction is slightly better.

If I have to tell you in terms of growth, it's in double digit, but the base is lower. We need to wait for some more time this actual replacement cycle to kick in.

Sir. That was very helpful.

Thank you from my side.

Thank you for the opportunity. Sir, my query is on the MHCV, you did mention that 3% to 3.5% commodity inflation is seen in the commercial vehicle.

If you could just help us understand what are the cost mitigating factors that we have taken in terms of pricing or cost control and value engineering in this space? Also, you could help us understand with the recent price hike in fuel and also there is expectations that for further fuel price hikes might take place in the industry.

How might the demand scenario pan out? Is there a possibility of incremental demand flowing in the secondhand market rather than the primary market?

Just if you could share thoughts on the same. Thank you.

First is the commodity price increase. We are also announced appropriate price increases for that, which is to tune of 2% to various vehicles.

That has been announced from 1st April. We also work on a lot of initiatives of cost reduction, whether it is value engineering, or whether it is optimizing the commodity use, and also improving the transaction prices in the market.

All these areas we are focusing, and we'll work on that. That work is already on.

Second, as far as the diesel price increase is concerned, I think most of the transporters have a price indexing with their customers. We believe that that will help them.

Maybe with a bit of a time lag, definitely, they will get these increases are addressed.

Anything, sir, because there might be a vicious cycle of inflation going ahead. Anything on the demand side flowing to the secondary market rather than the primary market?

There might be some impact on the primary market demand, if you could just share thoughts based on past experience?

May not be, because most of the agreements with their customers are also with a time-bound agreements. The efficiency of the goods reaching on time is also equally important.

Hence, the primary market is driven by the segments where there is an expectation in terms of the turnaround times and the efficiency of the logistics. The impact on this market will be relatively lower.

We don't expect any immediate change happening in the primary market.

Srinivas, if I'm Vinod Aggarwal, I may add in this how the CV market is likely to behave because of this increases. I think the fundamental thing will be the economy, that how the Indian economy is going to behave.

If the Indian economy continues to grow, if we suppose government is able to continue to make infrastructure investments, and economy grows, then there is no reason why this CV industry will not grow. Whatever diesel price increase, or as Srinivas mentioned, I think the transporters will have to pass on.

If the goods have to be moved in the country, if there is a GDP growth and the goods and services have to move, then, of course, there will be no choice with the consumers but to pay those hikes. Then the CV industry also will grow.

Of course, if the economy gets impacted because of all these factors, then there may be some impact on the demand. The second thing is the sentiment.

As of now, the consumer sentiments continue to be good. April, if you look at the sales figures for April, I think the demand for the industry has done extremely well.

May, of course, we will still know if we still 10 days to go in for May. As of now, I think we should remain optimistic.

Thank you, sir, for the feedback. Lastly, anything on labor and skilled labor shortages in the entire industry that we are getting to hear a lot?

How do you see any impact going ahead in both Royal Enfield and in the commercial vehicles space because of labor shortages, and any kind of actions to mitigate such shortages, if you can help us understand?

Two things, I think both the businesses, in fact, we're also sharing notes on that, is because of the election, migrant workmen movement here and there, that has caused a disturbance. LPG availability was causing an issue.

Things are settling down. As I mentioned, it was almost about 2, 3 weeks disturbance was in both the businesses.

It's all settling down. Let alone to us, even at the supplier end, in the last 2, 3 days, I'm seeing the production numbers are back, and suppliers' supply situation is also becoming slightly better.

We have to wait and see for some more time how things are panning out.

Thank you so much, sir. Thank you for the patient answers.

Thank you.

Thank you very much. Wonderful speaking to all of you, guys.

Look forward to speak to you in next quarter. Bye.

Thank you.

Thank you.

Thank you, all. Bye-bye.

Thank you.