Eicher Motors Q2 FY27 Earnings Call: Revenue Up 20% to Rs. 7,422 Cr, Chaiyar Ramp to 2 Million Units (EICHERMOT)

Best-Ever Quarter Across the Board

• Revenue of Rs.7,422 crore in Q2 FY 2026-2027 — best-ever Q2, up 20% from Rs.6,172 crore in Q2 FY 2025-2026.
• EBITDA of Rs.1,760 crore — highest ever, versus Rs.1,512 crore in Q2 FY 2025-2026; PAT of Rs.1,573 crore, up 15% YoY, including Rs.186 crore of Eicher's share of profits from VECV.
• Royal Enfield sold 376,722 motorcycles — highest-ever quarterly sales, up 15% YoY; India volumes of 340,847 (+16%), global volumes of 35,875, and H1 FY 2026-2027 India growth of 23%.
• Highest-ever monthly sales in September and October 2026 — with the trend continuing through the festive period.
• VECV revenue of Rs.7,568.6 crore, up 24% YoY — EBITDA up 22.7% to Rs.587.7 crore; PAT up 37% to Rs.341.6 crore in Q2 FY 2026-2027.
• Eight consecutive quarters of growth — CEO B. Govindarajan cited this resilience as confirming the strategy, and expects the trajectory to remain on an upward trend.

Supply-Constrained Festive Season; Lean Channel

• Bookings and inquiries up ~20-21% YoY — festive-period bookings slightly higher, some months possibly lower; management said it is sitting on substantial unfulfilled bookings and declined to give exact guidance numbers.
• Post-Diwali channel stock of ~7-8 days including transit — versus a normal operating level of 3-4 weeks, which management described as a deliberately lean inventory model.
• Festive retail was limited mainly by supply, not demand — the festive season began with Onam on 17 August and was still ongoing at call time; production rose ~15% YoY while volumes grew ~18% for April-October FY 2026-2027.
• Wholesale-retail gap questioned — IIFL's Joseph George cited ~765k domestic wholesales vs ~710k Vahan retail registrations (April-October FY 2026-2027), a ~55,000-unit gap; Govindarajan said Vahan includes spillovers, physical stock is ~7 days, and the gap should even out over a 7-month period, though the company will re-check its own tally.
• Post-festive demand still in double digits — inquiry and booking growth returned to pre-festive rates (Q3 FY 2026-2027); direct dealer shipments raised ~18% during the festive window vs a usual 1-2%, to cut ~4-5 days of C&F inventory.
• Rural and semi-urban demand shows no signs of slowing — booking growth in UP, West Bengal, Bihar and Rajasthan was above 23% in H1 FY 2026-2027; the company is monitoring agricultural output, credit availability and monsoon conditions.

Chaiyar Ramp to 2 Million; Greenfield to Follow

• Capacity of ~1.5 million units/year at start of FY 2026-2027 — built via debottlenecking at Vallam and Oragadam; Chaiyar Module 1 began production in Q2 FY 2026-2027, lifting capacity to ~1.65 million.
• Module 2 preponed to Q4 FY 2026-2027 — taking capacity to ~1.8 million units/year, readily available from Q1 FY 2027-2028; ramp targeted to start from January 2027.
• Module 3 expected from Q2 FY 2027-2028 — ahead of the festive season, bringing brownfield capacity to ~2 million units/year; the Chaiyar brownfield investment is ~Rs.1,050 crore across three modules.
• Greenfield Andhra Pradesh plant approved at ~Rs.1,225 crore — phase one on ~216 acres adds ~0.45 million/year, available in FY 2029-2030; Govindarajan corrected the total to 2.5 million/year, then restated it as 2.45 million/year.
• Himalayan 440 sold out in 17 days — ~6 months of capacity booked at ~Rs.2.29 lakh ex-showroom; bookings paused, to reopen, with a decision pending on continuing the 440 or offering only the 450.

Calibrated Price Increases; No Margin Guidance

• ~0.7% price increase taken in October — falls in Q3 FY 2026-2027 per CFO Vidya Srinivasan; the company has had about four pricing interventions in FY 2026-2027 (analyst-cited: 70bps in July, 280bps between January and April).
• ~50% of commodity impact covered through price increases — Govindarajan said the 0.7% hike does not fully offset aluminum, currency and steel pressures; the analyst noted steel prices have not eased much while aluminum has come off somewhat.
• Standalone ASP up 0.5% QoQ in Q2 FY 2026-2027 — from price increases and model/variant mix; consolidated ASP declined slightly on geographic mix; the J series is driving most India action, with Himalayan and Guerrilla performing reasonably well.
• CFO declined forward-looking margin guidance — citing commodity volatility; Govindarajan said the organization's focus is on absolute profit and growth rather than a range-bound margin percentage.
• Depreciation fell ~Rs.15 crore from Q1 to Q2 FY 2026-2027 — due to end-of-life of some assets tied to the 350cc and 650cc platforms in Q1; gross block rose versus the previous quarter.

Record CV Quarter; Middleweight Dominance Intact

• VECV Q2 FY 2026-2027 sales of 28,071 vehicles, up 28.2% YoY — best-ever Q2; H1 deliveries of 52,886, up 21.5%, also the highest ever; growth broad-based across vehicle businesses, engineering components and power solutions.
• Q4 FY 2026-2027 outlook "appears to be quite robust" — per VECV CEO B. Srinivas, based on the order book, with similar demand patterns across rural, semi-urban and urban segments; on market share dip, he acknowledged "a few areas, probably there can be changes".
• Eicher Pro X cumulative sales crossed 5,000 units — over 1,400 electric; Volvo buses in India delivered a record 422 units in H1 FY 2026-2027; a next-generation AI-enabled uptime center was inaugurated, building on Eicher's 100% connected fleet.
• ~82% middleweight market share in India — motorcycle share ~8-9%; the middleweight market has grown from ~60,000 units/month seven to eight years ago (Royal Enfield ~51,000) to ~1.3 lakh/month now (Royal Enfield ~1.21 lakh).
• 17 motorcycles across 350cc, 440cc, 450cc and 650cc platforms — Royal Enfield growing at a 20%+ rate; 450cc and 650cc platforms back to pre-GST booking levels; premiumization continuing with no signs of slowing.

Long-Haul on EVs; Export Ramp Underway

• Flying Flea C6 retail expanded to Hyderabad and Pune — plus Paris, Barcelona, Rome, Berlin and London in Europe, with customers having ridden 125,000 km cumulatively; the Flying Fleet city-plus brand is also sold in Bangalore, with Delhi, Cochin and Chennai planned; inquiries strong but bookings slower as buyers need more experience rides.
• "Not in any caring rush" on electrification — Govindarajan said there is "no science showing adoption within 3 or 5 years" and the company is "in for a long haul," with an initial focus on one product and a second planned on the same platform.
• International growth positive — Brazil, Colombia (now number 4 in market size), Mexico and the USA showing improvement; Royal Enfield's riders club has 45,000 sign-ups in Europe.
• Export volumes expected to grow in FY 2026-2027 — though Govindarajan declined to give numbers; CKD operations ramping in Brazil and SAARC, with a CKD in Indonesia and entry into Africa being explored.
• Himalayan 440 international interest — Royal Enfield is evaluating offering it in developing markets, while developed markets focus on the 450cc; recent EICMA announcements were cited as showing what's next as Royal Enfield's 125th year closes.