Home >Companies >News >After 18 months of decline, Royal Enfield to witness steady growth in sales

NEW DELHI: Royal Enfiled, India’s largest middle-weight premium motorcycle manufacturer, will report gradual improvement in sales of its motorcycles after eighteen months of decline, said analysts of brokerage firm Motilal Oswal Institutional Equities in report.

Parent Eicher Motors Ltd, on the other hand, is aiming at a $5 billion market value, driven by significant growth in its motorcycle and commercial vehicle businesses.

“Demand is back to pre-covid levels at Royal Enfield and is expected to improve going forward on the back of new launches and ongoing expansion in international markets. After witnessing severe headwinds over the last 18 months, we expect volumes to grow from hereon. The beginning of new launches could be an inflection point for RE as a completely new and improved platform could usher in a revival," said analysts Jinesh Gandhi and Vipul Agrawal.

They added that Volvo Eicher Commercial Vehicles, a joint venture between Eicher Motors and Volvo AG, will see cyclical recovery in volumes and profits, boosting consolidated PAT CAGR to 22%.

The Siddhartha Lal-led company is also eyeing new markets, outside India, with its middle-weight motorcycles and plans to significantly increase its export market share. Exports account for better operating margins compared to domestic sales.

“The management sees great opportunity in the international mid-size Bike market. The success of the 650 twins reflects and reinforces confidence in RE’s export strategy. It is expected to grow further with new launches such as Meteor, international product quality, and plans to launch its complete portfolio globally in due time," the analysts said. “Currently, export margin is well above domestic and the management wants to keep that way. It has started its first offshore CKD plant in Argentina during Sep’20 and plans to set up three new plants in Thailand, Brazil, and Columbia."

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