Eicher motors financial analysis

1. Gaurav sharma 16 Naveen 18 Anmol Vishwamber

2. Production of automobiles increased at a CAGR of 9.4% over FY06-16.
The automobile industry in India is expected to be the world's third largest by
2017.
The country currently being the world's second largest two-wheeler manufacturer.
Two-wheeler production is projected to rise to 34 million by FY20.
The industry accounts for 7.1 per cent of the country's Gross Domestic Product
(GDP)
100% FDI allowed for auto component sector.
Automobile exports grew by 15 per cent over the last year.
Sector
Overview

3. Company overview
Company
overview
In 1959 the Eicher Tractor Corporation of India Private Ltd was established.
1959 India’s first tractor rolls out of Eicher factory in Faridabad.
Eicher Motors Ltd (EML), incorporated in 1982.
1994 Eicher Motors acquires Enfield India Ltd.
In 2008 EML and Volvo Group's 50:50 joint venture VE Commercial Vehicles (VECV)
designs, manufactures commercial vehicles.
Royal Enfield “Bullet” is the longest running model in continuous production.
Eicher Trucks Eicher Polaris Multix Royal EnfieldTypes of Vehicles

4. Key points
Motorcycle industry in India did not grow in 2015-16 over 2014-15
Royal Enfield’s market share has grown to 4.7% in year 2015-16.
it added nearly 100 new dealerships taking the total dealership network to
over 500.
Company launched the Himalayan, a motorcycle purpose-built for adventure
and touring in the Himalayas in March 2016.
Sales of motorcycles of engine displacement of 150cc engine in 2015-16 has
grown from 12.0% in 2013-14 to 22.2% in 2015-16.
Company continues to grow handsomely and enjoys a dominant position in
250cc and above segment where it enjoys a 96.1% market share in India.
Management
Discussion
Analysis
Company acquired U.K.-based
Harris Performance Products
Limited
Company is expected to built
900,000 motorcycles annually
Company set up twelve exclusive
Royal Enfield stores including five
in Colombia, two in London etc.
In international markets
registering an annualised growth
of 16.4%.

5. Company added more than 600 permanent employees.
Company acquired a 50-acre plot at Vallam Vadagal, near Chennai at third
manufacturing facility.
Company has deployed a robust ERP system based on SAP platform. This ensures
high degree of system-based checks and control and continuous monitoring.
Revenue from international markets grew to Rs. 159.82 crores in 2015- 16,
registering an annualised growth of 32.8%

6. BALANCE SHEET
RATIO ANALYSIS

7. FY 2015-16 15688
CY2014 8738
CY 2013 6809
CY 2012 6389
FY 2015-16 2447
CY2014 1114
CY 2013 713
CY 2012 549
FY 2015-16 1451
CY2014 701
CY 2013 525
CY 2012 474
FY 2015-16 52096
CY2014 40860
CY 2013 13545
CY 2012 7848
TOTAL REVENUE (Rs in crores) EBITDA (Rs in crores)
MARKET CAPITALISATIONPAT (Rs in crores)
source: EML annual report

8. KEY RATIOS
RATIOS STANDALONE CONSOLIDATED
EPS (RS) 453.20 470.90
BOOKVALUE 791.89 1,275.51
DIVIDEND PER SHARE (RS) 100 100
EBITDA MARGIN (%) 30.84 16.32
PBT MARGIN (%) 28.61 13.38
NET PROFIT MARGIN 19.87 9.26

9. CURRENT RATIO 0.98 1.02
INVENTORY TURNOVER RATIO 20.60 15.46
DIVIDEND PAYOUT RATIO (%) 22.08 21.25
TOTAL DEBT/EQUITY 0 0
P/E RATIO 42.32 40.80

10. LAST SIX MONTHS STOCK PERFORMANCE

11. PEER COMPARISONS

12. Management Discussions and Analysis
2014-15
( CRORES )
2015-16
( CRORES )
INCREASE/DECREASE
REVENUE FROM OPERATIONS 3,031.22 6,188.03 104.1%
DOMESTIC BUSINESS 2,568 3,764.9 46.6%
TOTAL EXPORTS 5,943 10,545 78%
• Operating margin is increased to 14.1%

13. COMPETITOR COMPARISON

14. BALANCE SHEET

15. PROFIT AND LOSS ACCOUNT

16. IMPORTANT P/L ITEMS
216.3
289.2
2568
382.5
531.3
3764.9
0 500 1000 1500 2000 2500 3000 3500 4000
PAT
EBITDA
Sales
Chart Title
FY 2015-16 FY 2014-15

17. CASH FLOW STATEMENT• It shows how much cash is generated from a company's core products or services and
how it is used during time interval specified.
• It breaks the analysis down to operating, investing and financing activities
• According to Companies Act,2013 , all Companies, Public or Private, are mandatorily
required to prepare Cash flow statement except One Person Company, Small Company
and Dormant company.

18. Operating Activities
 It includes revenue generating activities of business
 Cash Flow from Operating Activities = Net income+ Noncash Expenses + Changes in Working
Capital
 Net cash flow from operating profit is jumped to 14064.71 Cr from 685.96 Cr because it has
sold 5,08,099 Royal Enfield vehicles and 52,025 VE Commercial Vehicles last year .

19. Investing Activities
 It consist of buying and selling long-term assets and other investments.
 Constitute payments made to acquire long-term assets, as well as cash received
from their sale.
 Examples- purchase of fixed assets, sale of securities issued.
 It has invested 400 crore more as company opened stores in Indonesia and
Thailand .
 It announced markets in North-America
 It bought the UK-based motorcycle engineering and design firm, Harris
Performance.
 Launched Himalayan, an motorcycle for adventures and tourists.

20. Financing Activities
 It accounts for external activities that allow a firm to raise capital and repay investors, such
as issuing cash dividends, adding or changing loans or issuing more stock.
 Cash flow from financing activities shows investors the company's financial strength.
 Company has distributed their wealth among investors.