fundamental analysis of eicher motors business model products they provide management quality market share of company analysis of financial statement ratio analysis peer to peer comparision go through fundamental analysis and take your own decision to buy, hold, sell

1. 1
Introduction
Eicher Motors Limited, incorporated in 1982, is the listed
company of the Eicher Group in India and a leading player in the
Indian automobile industry and the global leader in middleweight
motorcycles.
Eicher has a joint venture with Sweden’s AB Volvo to create
Volvo Eicher Commercial Vehicles Limited (VECV). VECV is
engaged in truck and bus operations, auto components business,
and technical consulting services business
Eicher Motors Limited (EML) is the listed parent of Royal
Enfield, the global leader in middleweight motorcycles. The
world’s oldest motorcycle brand in continuous production, Royal
Enfield has made its distinctive motorcycles since 1901.
Eicher Motors is listed on the BSE and National Stock Exchange,
and has been part of the NSE’s benchmark Nifty 50 Index since
April 1, 2016.

2. 2
Business model
Product of Eicher motors
Eicher Motors Limited is an Indian multinational automotive
company that manufactures motorcycles and commercial vehicles
Motorcycles
Royal Enfield
• World’s oldest motorcycle
brand in continuous
production
• Focussed on mid-sized
motorcycles (250 cc - 750 cc)
• Products sold in India and
60+ countries globally
through exclusive stores and dealers
Portfolio
• Motorcycles: Classic, Bullet, Himalayan, Interceptor INT
650, Continental GT 650
Meteor 350
• Apparel (men and women exclusive): Protective riding
apparel, urban casual wear and riding accessories
• Motorcycle accessories, protective, seats, bodywork,
controls, wheels, luggage and engine Commercial

3. 3
Commercial Vehicles
VE Commercial
Vehicles
• Modernising
commercial
transportation in India
and the developing
world
• Best-in-class, fuel-
efficient trucks and
buses with superior
uptime and modern
industry-first features for driving productivity and
profitability
• Leadership in Light and Medium vehicle segment
• CV industry’s first state-of-the-art Uptime Centre
• Acquired Volvo India’s premium buses segment
Portfolio
• Eicher branded Light & Medium duty trucks (4.9-15 tonnes),
Heavy duty trucks (16-55 tonnes) and buses (12-62 seats)
• 100% connected vehicles powered by connected vehicle
solution – Eicher LIVE
• Volvo branded trucks and buses
• Engineering components and aggregates
• Medium-duty base engines for Volvo Group’s Euro VI
requirements

4. 4
Target Customer
They target big Transportation Companies, Travel Agencies, and
some motorcyclist are considered as their prime customers.
Distribution channel

5. 5
Competitors
TVS motors
Type Public
Net income ₹615 crore (US$82 million) (2021)
Total assets ₹21,992 crore (US$2.9 billion) (2021)
Total equity ₹3,826 crore (US$510 million) (2021)
Number of employees 5,133 (2020)
Hero MotoCorp
Type Public
Net income ₹2,982 crore (US$400 million) (2021)
Total assets ₹22,161 crore (US$2.9 billion) (2021)
Total equity ₹15,198 crore (US$2.0 billion) (2021)
Number of employees 8,599 (2020)
Ashok Leyland
At the end of fiscal year 2019, the net worth of Ashok Leyland
was around 83 billion Indian rupees. This was estimated to
increase to over 100 billion rupees by fiscal year 2021. The
company was the second largest manufacturer of commercial
vehicles in India and the fourth largest bus manufacturer
worldwide.
Force motors
Formerly Bajaj Tempo Motors
Products Traveller Trax Gurkha Orchard Balwan Tractors
Revenue ₹2,012.71 crore (US$270 million) (2021)
Net income ₹ -111.86 crore (US$ 16 million) (2021)

6. 6
Management review and
Management Quality
Management review
Two-Wheeler Industry performance
In 2020-21, the two-wheeler industry sales volume was 15.1
million units, a decline of 13% from 17.4 million units in 2019- 20
The motorcycle industry sales volume was 10 million units in
2020-21, a decrease of 11% from 11.2 million units in 2019-20.
The motorcycle industry performed better than the scooter
industry. The scooter industry sales volume was 4.5 million units
in 2020-21, a decline of 20% from 5.6 million units in 2019-20.
The year 2020-21 was an unprecedented year as the outbreak of
COVID-19 pandemic affected economies and livelihoods across
the globe. The instances of lockdown across the country and
states, and the spread of the deadly disease resulted in suspension
of operations at offices, plants and dealerships, primarily in the
beginning of the year which impacted business activities. The price
increases on account of regulatory changes, supply chain
disruption and acute commodity pressure further aggravated the
situation.
Product Enhancements and Portfolio Expansion
Company has long-term plans to expand its product portfolio in
the middleweight segment to offer more choices to customers
across the globe. Staying committed to this plan even through
times of uncertainty in the industry, Royal Enfield introduced the
next-generation platform with the Meteor 350 in November 2020,

7. 7
an all-new motorcycle in the cruiser segment. This also marked
the first ever digital launch of a motorcycle for Company. The
very creative and unique way of using technology for the launch
not only delighted the Royal Enfield community and enthusiasts
but also helped your Company reach a much wider audience.
Future prospects
• Some insights for the coming years from the analysis,
management discussions and con calls are as follows.
• The company will see a revenue decline in double digits in
FY 2021 due to production loss, overcapacity, labour crunch
and decline in demand due to Covid-19 outbreak. The Royal
Enfield orders are however mostly pre-booked so revenue
can see some relief with selective price cuts or discounts
which can stimulate demand.
• The 500 cc product portfolio of Royal Enfield has not been
doing well since the last few years. Hence it will be
discontinued in BS6, particularly since it has 650 cc Twins to
dilute the revenue impact.
• The company has already moved to BS-6 for Classic,
Himalayan and 650cc Twins of Royal Enfield. However due
to the early move to BS-6 the company is losing some pre-
buying opportunity as dealers are stock-out in some parts of
the country due to disrupted supply chains.
• Both Himalayan and Twin have performed well in the export
market. The company’s slower approach on dealer
expansion to ensure profitability is expected to pick up the
pace once the expansion happens.
• Overall the company is a near-monopoly in the Mid-Size
motorcycle segment in India and has solid fundamentals and
debt-free capital structure. The market for the company is not
near saturation and is expanding globally. Hence the stock
can see increased multiples from current levels once the
supply chains and demand is restored. Therefore the long

8. 8
term outlook is positive for the company and investment can
be done at correct price levels.
Management quality
NAME DESIGNATION
Inder Mohan Singh Independent Director
Kaleeswaran Arunachalam. Chief Financial Officers
Manhar Kapoor Co. Secretary & ComplOfficers
Manvi sinha Independent Director
S Sandilya Chairman
Siddhartha Lal Managing Director
Vinod Aggarwal Non-Executive Director
Vinod K Dasari Whole Time Director & CEO
Mr Vinod Dasari is the new CEO of the Royal Enfield and was
previously the MD & CEO of Ashok Leyland. Mr Siddhartha Lal
is the Managing Director of Eicher and represents the promoter’s
interest in the company. The management has shown dedication
towards shareholder’s wealth and has no past records of any
principal-agent conflict.

9. 9
Industry growth Analysis
The Indian Auto Industry comes in the top 5 largest auto
industries of the world. India is also a prominent auto exporter
and has strong export growth expectations for the near future. The
support from the government is providing the auto companies
with a boost needed in their development.
The automobile industry is supported by various factors such as
availability of skilled labour at low cost, robust R&D centres, and
low-cost steel production. The industry also provides great
opportunities for investment and direct and indirect employment
to skilled and unskilled labour.
Indian automotive industry (including component manufacturing)
is expected to reach Rs. 16.16 -18.18 trillion (US$ 251.4 - 282.8
billion) by 2026.
The Indian auto industry is expected to record strong growth in
2021-22, post recovering from effects of COVID-19 pandemic.

10. 10
Electric vehicles, especially two-wheelers, are likely to witness
positive sales in 2021-22
The automobile industry is one of the most important drivers of
economic growth of India and one with high participation in
global value chains. The growth of this sector has been on the back
of strong government support which has helped it carve a unique
path among the manufacturing sectors of India. The automobiles
produced in the country uniquely cater to the demands of low- and
middle-income groups of population which makes this sector
stand out among the other automobile-producing countries.
In 2017, India became the world’s fourth largest automobile
market, and the demand for Indian vehicles continues to grow in
the domestic and international markets. To meet the future needs
of customers (including the electrical vehicles) and stay ahead of
competition, manufacturers are now catching up on upgradation,
digitization, and automation.
Market share

11. 11
Competitive Advantages
Competitive advantage refers to factors that allow a company to
produce goods or services better or more cheaply than its rivals.
These factors allow the productive entity to generate more sales or
superior margins compared to its market rivals
Disruptive Technology.
• Vehicle assembly
• Engine assembly
• Surface finishing
• Machining
• Fabrication
• Auto buffing
Corporate governance
Corporate governance is defined as the structures and processes
by which companies are directed and controlled. Good corporate
governance helps companies operate more efficiently, improve
access to capital, mitigate risk, and safeguard against
mismanagement.
Major terms and References
(i) Identifying persons who are qualified to become Directors and
who may be appointed in senior management in accordance with
the criteria laid down and recommending to the Board their
appointment and removal.

12. 12
(ii) Laying down the evaluation criteria for performance
evaluation of Independent Directors.
(iii) Carrying out evaluation of every Director’s performance.
(iv)To decide on whether to extend or continue the term of
appointment of the independent Director, on the basis of the
report of performance evaluation of independent Directors.
(v) Devising a policy on diversity of Board of Directors.
(vi) Formulating the criteria for determining qualifications,
positive attributes and independence of a Director and
recommend to the Board of Directors a Policy relating to the
Remuneration of the Directors, Key Managerial Personnel and
other employees.
(vii) To undertake and perform all such functions, powers for
administration and superintendence of Employees Stock Option
Plan – 2006 (ESOP), inter alia as contained under SEBI (Share
Based Employee Benefits) Regulations, 2014 including any
amendments thereof.
(viii) The Nomination & Remuneration Committee shall meet at
least once a year.

13. 13
StakeholderS' Relationship Committee
In terms of Regulation 20 of the SEBI (LODR) Regulations, 2015,
the Company has a Stakeholders' Relationship Committee which
consists of two Non-Executive Independent Directors. The
Committee looks into the redressal of Shareholders’ and
Investors’ complaints relating to transfer of shares, Non-receipt of
Annual Report and Non-receipt of declared and Dividend etc.
Shares Committee
The Shares Committee of the Company consists ofthree members
i.e. Mr Siddhartha Lal - Managing Director & Chief Executive
Officer, Mr Lalit Malik - Chief Financial Officer and Mr Manhar
Kapoor - General Counsel & Company Secretary to look after
and approve transfer/transmission of equity shares,
dematerialisation, issue of duplicate certificates, etc. All valid
requests for transfer & transmission of shares in physical form,
duplicate issue of share certificate were processed in time.
Subsidiary companies
Subsidiary companies of the Company are managed by their
respective Board/authorised representative having the rights and
obligations to manage such companies in the best interest of their
stakeholders.

14. 14
Quantitative analysis
Analysis of P&L and balance sheet

15. 15
Sales growth
1 year = - 5.05%
3 years = - 1.28%
5 years = 6.9%
Profit growth
1 year = - 30.16%
3 years = - 8.09%
5 years = - 0.12%
Profit and loss account
Net sales declined in 2021 after gradually
Increasing from 2017 to 2020
Operating profits started decreasing in 2020 and further declined
in 2021
In the year of 2019 net profit was highest
Adjusted EPS was increased but started declining in 2020 and
dropped heavily in 2021
Balance sheet
Share capital of the company has gradually increased from 2017
(27.21 cr )to 2020 (27.33 cr )
Total reserves have also been increased from ₹3895.38 cr to ₹
9,677.67 cr from 2017 to 2020
Total liabilities have also increased over the years
Total assets have increased and is of the same value as liabilities

16. 16
Peer to Peer comparison
Amount in crs
Name of the
companies
Net sales Operating profits Net profits Total assets and
liabilities
Eicher motors 8720 1, 783 1, 347 14, 413
Tvs motors 19421 2, 232 594 21, 865
Hero MotoCorp 30959 4, 085 2, 918 23, 096
Ashok Leyland 19454 2,462 -165 42,069

17. 17
Cash flow
Cash flow statement of the co. is very poor and mainly they are
not able to generate positive cash flow because of their bad
investing activity
Looking at its compititors like TVS motors and hero MotoCorp
their cash flow is stable and growing mainly TVS motors is doing
well in generating cash.

18. 18
Ratio analysis
Sector PE ratio is 67.24
Sectoral dividend yield is 0.66%
Sectors P/B ratio is 4.85
Name of
company
Ratios
P/E Debt
to
equity
EPS
In rs
ROE
In %
P/B Dividen
d yield
%
Eicher 46.34 0.01 58.25 12.6 6.40 0.63
ashokleyland No
P/E
becaus
e co. is
in loss
3.36 -0.50 -2.11 4.67 0.52
Hero
MotoCorp
18.8 0.04 129 18.7 3.08 3.73
TVS motors 35.2 2.45 16.6 16.9 7.07 0.58

19. 19
Conclusion
Strengths of company
• Company has been maintaining healthy ROE of 24.34%
over the past 3 years.
• Company is virtually debt free.
• The Company has been maintaining an effective average
operating margins of 26.76% in the last 5 years.
Weakness of company
• The company has shown a poor profit growth of -8.09% for
the Past 3 years.
• The company has shown a poor revenue growth of -1.28%
for the Past 3 years.
• The company is trading at a high PE of 47.88.
Thank You

20. 20
Reference
• Annual report
• Investor presentation
• Screener
• Ticker 2.0
• Ticker tape
• statista