Smooth Sailing All The Way
Eicher Motors’ (EML) CEO and Managing Director Siddhartha Lal is taking rapid strides to go global to attain large scale. He shifted base to London in 2015 to expand the company’s global footprint, and also spearheaded the establishment of an R&D centre of Royal Enfield, the motorcycle division and profit engine of EML.
EML’s consolidated net revenue from operations for the year 2016-17 was Rs 7,033 crore, a growth of 35 per cent over 2015-16. In 2016-17, EML’s PAT grew 45.8 per cent to Rs 1,667 crore. VE Commercial Vehicles (VECV), EML’s joint venture with Volvo Group, also had a good year in tough market conditions as its consolidated net revenue from operations for the year 2016-17 stood at Rs 8,549 crore, a growth of 10.5 per cent over the previous year. In 2016-17, EBITDA and PAT of VECV grew 4 per cent and 3 per cent respectively, compared to the previous year. EML’s sale of commercial vehicles grew 12.9 per cent to 58,604 units driven by a strong growth in sales of heavy duty trucks (23.1 per cent) and exports (23.4 per cent).
Lal became an iconic figure in the global motorcycle space when he made the audacious move of not disposing off Royal Enfield in the early 2000 after he was appointed group CEO.
Royal Enfield has successfully withstood all rumblings such as sudden change in implementation dates for BS-IV emission norms, severe cyclone ‘Vardah’ at Chennai (where RE has a plant), demonetisation, etc., and managed to register a growth of 31.2 per cent over the previous year by selling 6,66,135 motorcycles. This feat has enabled the company to enhance its market share in the 150cc and above category of motorcycles in India from a mere 4.7 per cent in calender year 2011 to 24 per cent in 2016-17.
For the current fiscal, the company has set itself a target of producing 8,25,000 motorcycles across its production facilities. It recently rolled out its new flagship models — the Interceptor 650 and the Continental GT650 — this year, which were unveiled at the 2017 EICMA.
During 2017-18, EML will invest Rs 450 crore in VECV towards new product development and capacity enhancement. The group’s businesses are fully geared to operate in the latest tax regime under GST.
