Eicher Motors

(sagar.sanghvi) #675

had few questions on Jawa :-

  1. What is the pricing difference between Jawa and RE 350?

  2. also which one is better in performance? what is RE doing to fill the gaps in performance?

  3. By when would new RE models to come into production? and for those models when would RE start booking?

  4. what are the initial reviews for Jawa bike?

  5. Since Jawa is completely sold out till July 2019, can RE start discounting to sell older models. if they start discounting, then what would be volume increase and impact on margins on account of discounts?

  6. Does Jawa providing a better financing options?

  7. is there any difference in profile of customers?

  8. what would Jan volumes look like for RE? would there be Jawa impact or is there a genuine brand fatigue?

(Ranga Kiran) #676

(Ranga Kiran) #677

(Dhiraj Dave) #678

Eicher has been excellent learning and as well equally rewarding investment for me. While I continue to like fundamental of business, i…e long way of premiumisation in Indian bike, Constant engagement of Top managment with consumer, New product launches at appropriate time; there are some headwinds which industy in general, and Eicher in partcularly facing. The increasing competition and luming uncertainity of E-Bikes (with governement action in last 2-3 years directing to its preference of Ebikes), henceforth Eicher growth would be more dependent on New Twin success. Further, higher base is also likely to catch up and new volume growth may range in 10-15% in medium term based on new product launchs success of the company.

Since allocation to Eicher was singificantly high in my personal portfolio to begin with (at peak almost 28% in March 2016, which was systematiically reduced to 23% in March 2017, to 16% in March 2018 and around 9% as on Feb 8 2019), I have sold my holding systamatically over last 4 years to bring it below double digit. I continue to like business and also developed my holding bias for Eicher. It was very difficult for me to sell Eicher shares in last couple of months and bring my allocation to 9%.

While I intend to hold Eicher for very long term, I may further change my allocation by couple of percent in next 6-12 months. Since I was regular contributor to thread, I thought it would be good to share my deal details to the forum. I have learnt a lot from members, personally from @KS16, @rajpanda and @sammy11.

I am not at all negative about Eicher, but could not find reasons to keep it with more than 20% allocations in my portfolio. The last trache reduction in Eicher has been replaced by very expensive 3M India in my personal portfolio which is around 4.5% allocation in my current portfolio.

Discl: I am not SEBI Registered investment Advisor and I am not recommeding any investment actions to investors. Investor shall do their own due diligence before making any investment. My view may be biased due to my investment in Eicher and 3M India.

(JKS) #679

Very gracious of you to say about the learning Dhiraj. Its usually the other way around. I have reduced my Eicher qty, now to insignificant levels. At the best of times, I made 2-2.5X in this stock and it was the best learning experience from the likes of Dhiraj. My journey into this stock was almost fairy tale (I attended one of those sessions of Motilal Oswal’s Ramdeo Agarwal and heard his oft quoted ‘buy right, sit tight’ session, in person; after that, I went to BLR to visit a client and I recollected the session and went to the parking lot to see the composition of vehicles. I was stunned to see the amount of new RE bikes (it was a typical IT co. staff parking lot) and bought the stock, in the next few days, after some more diligence. It has been a gr8 journey. I expected a quick revival in the Truck/bus/ segments but it is taking its time. I have now reduced it to just a tracking qty.

(Nikhil Rodrigues) #680

Good to hear your experience with reducing stake in Eicher.

Would like to add mine own. I started investing in Eicher pretty late (in 2014), around 10,000 level. Added at 14K, 15 and 16K levels. Along the way also did a few trades like selling at 19K and buying back at 17. Or Selling at 23K and buying back at 21. Eicher was 15-18% of my portfolio throughout 2014-2018. I sold my entire holding around 29K last June-July. Learnings are

  1. Eicher was at 65 PE when I first bought. I sold at 35 PE but still made 3X and 33% CAGR in 4 years. Learning here was PE de-rating does not happen overnight. If the business and management quality is good, market gives few quarters time to stock and de-rates slowly. Investor can choose to get out in this period if he wishes to.

  2. If market de-rates a stock, it tells you something. Keep investigating more and check your thesis again. Eicher sales volume growth reduced from 25% to 20 and 10% in 2018. First thought reasons were strike at factory, mandatory 5 year insurance, overall industry slowdown etc. But once I did the scuttlebutt, it was apparent that demand side issues were there. The waiting period which was 3-6 months earlier was 15 days to zero. Throughout these 4 years, this waiting period was big metric that I had focused on.

This coupled with low/zero volume growth for 3 consecutive months and I knew the growth would not come back to previous levels.

  1. After July-Aug 2018, the Eicher story was clear. If you were okay with 10% volume growth and 15% sales growth, it was worth holding. For me, there were better opportunities and I exited.

(Marathondreams) #681

Average results for the quarter

Extract as below -

In the quarter ended December 2018, Royal Enfield’s total revenue from operations rose 3% to
Rs. 2,341 crore, compared to Rs. 2,269 crores in the same period last year; EBITDA was Rs. 680 crores, down by 4% compared to Rs 707 crores in the same period last year; Profit After Tax grew by 2% to Rs. 533 crores from Rs. 521 crores in the same period last year. Royal Enfield sold 193,871 motorcycles in the quarter, registering a decline of 6% from 202,736 motorcycles sold in the same period last year.

(Ranga Kiran) #682

(Rahul) #683

Another strike…

(Balusu Aditya) #684


Nirmal K Minda of Minda Industries is also one of them.