Dear Anil
Pl understand that these numbers are dispatches I.e. Billing to dealers and not retails I.e. Deliveries to customers.
With waiting period of 4-6 months, the only plausible explanation would be lower no. of working days in Oct due to festive season and hence lower production.
month.My (deliveries)registered
Latest HDFC Security on Eicher has price target of Rs 14487.
Consolidation projection
cY14 CY15 CY16
Sales Rs cr 8707 12340 16211
EBITDA Rs Cr 1100 2032 2979
PAT Rs Cr 653 1187 1746
EPS Rs per share 241 439 646
I think the icing on the cake has finally arrived. Am talking of VECV numbers
Eicher November sales:
RE 27542 bikes, 52% growth YoY.
VECV 2778 units, 24% growth YoY
@Raj, You are too fast to be defeated in reporting number of monthly sales !!! I think, for next phase of price increase would now be driven by CV business.
Goldman 12 month Price target of Rs 19,000+ for Eicher Motor
Good insights on the VECV side of the business from mgmt.
Have increased my confidence on revival from that segment.
Note: Dont’ get mislead by the title of the video “expects-45” …it’s 4-5% 
I can understand RE being a monoply enjoying pricing power with good chances of increasing market share from a low base and CV business going to pick-up on forward basis,but somehow i see the company being more in news every week.One possible reason is its past performance and better future visibility but Is it possible for some vested interest(may be few major stock holders) to keep making stock always in news with only upward bias? What are indicators in such scenarios? Huge trading volumes?
Stock price keep going northward and PE of 80+, i am not sure whats rational PE in such scenarios during bull run start phase itself and how much can it correct in case of any minor market correction which is natural in bull run too?
Views invited.
Disc: Not Invested but closely monitoring
Quite possible Ashish, even am not liking the fact it’s getting so hyped up.
Am a small salaried investor and would have liked it grow in lines with it’s earning so that i can accumulate more each month. But unfortunately, we are in bull market 
?
Eicher is planning to build a 600cc all terrain multi-transport product for the small rural consumer. Opinions certainly sought …
Eicher continues to chug along on its RE sales, which should stabilize at 40-45% growth (YOY) for next few months, going by their recent past track. Till the high base catches up and they hit a plateau. To be able to sustain this for longer, they would need to increase capacity, for which plans are already underway. With land acquisition being completed already, management is on record that they would be able to roll out the first bike from the new facility within a year they start construction of the plant.
Their CV sales are picking up momentum, and so are that of other CV maufacturers. This indicates that things are slowly but surely turning around, although the pace is slow and this is still early times.
Polaris JV is their best kept secret till date and there has not been any news till now. Attaching a link on what Polaris does overseas http://www.youtube.com/watch?v=DmDsEKMifTY
And leave it to Siddharth Lal and his team to come up with the adaptation mentioned in the above article. Prima facie, this looks like a substantial and untapped market - “low income auto”, and who knows, it may pick up steam like the low income home financiers !! Pricing would be a key and the way they market it also. But if they are able to pull it off, it gives another avenue for sustainable medium-to-long term growth visibility for the company.
Disclosure - holding and bullish.
Hi,
Today Eicher closed at life high of more than Rs 16,000/-. Some of the boarder attributed the increase in price to reference of Obama in today Speech of Siri Fort in New Delhi.
http://mmb.moneycontrol.com/india/messageboardblog/message_thread/28022543/29830303#m29830303
Anyone knows actual reason beside “Obama Effect”?
Why try to find reason for every 5% move when the stock has moved so well in recent past and company is doing so well 
For long there was no action on thread since the counter was also silent. Yesterday’s spurt at least brought us in action
I concur with your view Raj. What is important is growth in sales and profit then what does Obama feels.
Sales for Jan 2015 as under
Jan 15 Dec 14 Jan 14 YOY Growth MOM Growth
RE 28,927 28,634 20,232 43% 1%
CV 3,262 3,387 2,608 25.1% -3.7%
December Sales is has been normally higher then Jan sales. So negative growth in CV MOM is not worrysome. The growth in YoY in line with expectation.
Eagerly waiting for 2014 results on Feb 13 2015 and also dividend announcement.
Good set of results for Q4 and FY14.
Bikes business:
Sales for Q4 was up 57% (over Q4-FY13). For full year, sales was up 78%.
Quarterly sales growth in 2014 for Q1, Q2 and Q3 (over 2013) was 92%, 98%, 79% and in Q4 it was 57%. They have reached peak production of around 28-29K vehicles in Q4 and it was reflecting in their month on month growth numbers of 40-50% compared to 70-80-90% in earlier months. This level of growth will continue for next few months until the base trends higher and growth slows. Management commentary on new capacity addition is therefore important.
Net profit for Q4 was up 85% and for FY14 was up 100%. While this looks very good, the quarterly trend in profits is also reducing similar to the sales trend. Net margin expanded from 16.4% in 2013 to 18.4% in 2014. Lower raw material costs reflected in margin expansion. If they add new capacities, then additional costs related to that will lower the margins till the sales from the new capacity is effected.
CV business (basically, consolidated minus standalone):
CV sales growth trend in Q1-Q4 (over 2013) was -7% (degrowth in Q1), 18%, 21% and 27% (increasing trend over Q2-Q4), which is heartening. Even the CV profit has grown for the 1st time (albeit by only 3%) in Q4 after de-growth in Q1-Q3. The quarterly CV net margins were -1.71%, 1.6%, 1.65% and 2.05%, and ended full FY14 at 0.98%. But the trend is positive.
This shows that Eicher is still an RE story. Hopefully 2015 should see more contribution from the CV side.
All in all, to sustain the current high valuations, the company needs to evidence their growth plans. As per last quarter concall, they had already purchased land sufficient to double their capacity. Hope is that they would already have started adding new capacity.
Further interesting point will be the plans on the Polaris JV. now that they have released some press report on it, we should see some action on this part of the business also.
Discl - invested.
Hi Vinay,
The oragadam facility is equipped to handle 5 lac production with gradual ramp up, and mgmt. in last call has guided for 4.5 lac production from the facility in CY15. The land acquisition you referred to is for the next 5 lac capacity. So practically for this year and few months next year, no worries on capacity. Rely on mgmt to bring the next 5 lac capacity in the meantime. With that margins should further inch up this year I think.
CV growth coming back is the icing on the cake news. If cv can grow even 20% compared to last year we should expect a higher profit growth.
Overall am expecting another at least 50% growth in profits for current year.
Call add by MD & CEO Siddharth Lal & Lalit Malik, CFO. Key Points by Capital Mkt:
For the fourth quarter ended December 2014, the company reported 60% rise in net profit (post adjusting minority interest) to Rs 153.77 crore on a 37% rise in net income from operations at Rs 2,294 crore. PAT rose 49% at Rs 181 crore.For the year ended December 14, the company reported 56% rise in net profit (post adjusting minority interest) to Rs 615.4 crore on a 28% rise in net income from operations at Rs 8,738 crore. PAT rose 34% at Rs 702 crore.
The company sold 82K Royal Enfield (RE) in Q4 registering over 50% growth.In CY 2014, the company sold a little over 300,000 RE, registering over 70% growth.The order book remains strong for RE.As part of its overall business expansion plans, the firm will set up two technology centres - one in Chennai and another in the UK.The larger one will be at a new 4.5 acre property that the company has acquired on Old Mahabalipuram Road in Chennai and will be operational by second quarter of 2016.The smaller satellite center is being set up in Leicestershire, UK and will be operational by the end of 2015.
In 2015, the company plans to manufacture 450,000 RE units. Royal Enfield currently sells various models, including Bullet, Classic, Thunderbird and Continental GT.In the Eicher trucks and buses segment, the company did 40,700 units in FY 2014, a little less than 41,000 it did in FY 2013.In the LMD segment, the company has managed to increase its market share to over 32% from 20% a year back.In 16 tonne and above segment, while industry registered 62% growth in Q4, the company registered 40% growth.
Pro 6000 and 8000 series should help the company in gaining back market share in 2015.
R&D expenses will go up following the two investments. From a single model company, the company is going to multiple model company.
In 2015 alone, there will be around Rs 500 crore capex investments mainly for Royal Enfield.
Waiting period for RE motorcycle is more than five months.
With the old plant and Oragadam phase 1 and phase 2 fully operational, the company has capacity to produce over 700,000 mc per year. Oragadam Phase 2 will take another 4-5 months to start rolling out new MC.
In terms of export market, Latin America (Columbia) and South East Asia are the two markets where the company is targeting for exports in near future.The company has 390 dealers as of date.
Q4CY14 conference call: Key highlights Royal Enfield
â Order intake continues to exceed supply. Current order back log stands at ~5 months.
â Management is targeting ~450k production capacity in 2015. Phase 2 of Oragadam plant will come on-stream by Q3 2015. Full ramp up can be achieved over 2-3 quarters with total capacity touching ~50k units per month from Oragadam and ~10k units per month from the earlier plant
â Management plans to invest in various strategic areas â proposes to set up 2 technology centres, 1 in Chennai which should come on stream by Q2 2016, and the other satellite tech centre in UK, by end 2015.
â Investments in front-end experience â set up new retail format stores targeted to enrich customer experience, and in accessories /apparel range
â Increasing pace of dealer addition (ended 2014 with 390 dealerships). With rising volumes, smaller towns are becoming lucrative, which are contributing incremental ~80% of sales.
â Investments in at least 2 new platforms will spawn a range of products in the 250-700cc range over the next 2 years.
â Exports â investments in distribution, marketing systems and manpower. Currently, the focus is on building its network in Columbia and the US. Latin America and ASEAN countries hold immense potential for RE from 2017.
â These initiatives will result in sharp jump in capex/R&D investments going ahead. Management targets INR5bn capex/investment spend in 2015.
â Took ~2% price hike in Q1 2015 (over and above the excise hike), which should benefit margins going ahead
â There exists scope for further improvement in gross margins gaining from better efficiencies. A lot of outsourced products are now manufactured in house (fuel tanks, engines, machining, etc); larger scale could further bolster efficiency levels.
VECV
â Industry is showing signs of recovery and expects the trend to continue. â Launched the full Pro series of trucks. Pro 6000/8000 series of trucks are ~7-10% higher priced than similar offerings by peers; but, the series offer ~5% more payload and ~10% better fuel efficiency.
Source of above concall highlight is from Edelweiss. Report access is free with login on Edelweiss site.
