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Healthy growth momentum continues in Q4FY26: EIM delivered another resilient quarter, supported by sustained demand across Royal Enfield and strong execution at VECV. The company retained its dominant position in the mid-size motorcycle segment with ~87% market share in FY26, while traction remained healthy across Hunter 350, Classic 350, Himalayan 450 and newly-launched premium motorcycles. International business continued to scale up steadily, aided by expansion across APAC, EMEA and the Americas, alongside entry into Taiwan and Hong Kong markets. We believe improving premiumisation, expanding global reach and continued new launches are expected to support healthy volume growth and sustain profitability in the medium term.

Brand strength, product expansion and EV readiness: EIM continued to strengthen its premium positioning through multiple launches, community-led engagement initiatives and rider ecosystem expansion. The company also launched its first Flying Flea store in Bengaluru, signalling gradual progress towards premium electric mobility. On the manufacturing front, Oragadam and Vallam facilities together support a capacity of over 1.5 Mn motorcycles, while brownfield expansion at Cheyyar is underway, reinforcing Eicher’s longterm growth roadmap and improving scalability across markets.

VECV maintains strong momentum: VECV crossed 100k unit sales in FY26, delivering 14.7% growth versus industry growth of ~13%, while retaining leadership in the LMD truck segment. The business introduced 106 new products and expanded Pro X across EV, diesel and CNG variants. Network expansion, manufacturing scale-up and sustained brand engagement are expected to further strengthen competitive positioning, going forward.

View and Valuation: We largely maintain our FY27/FY28E EPS estimate. We value the stock on P/E multiple for FY28E EPS, on the basis of relative comparison amongst the peer group across financial and operating metrics. We maintain our target price of INR 7,650 along with an ‘ADD’ rating on the stock. We believe sustained broad-based growth across Royal Enfield and VECV, will be supported by capacity expansion, improving operating leverage and a strong product pipeline.

Q4FY26: Result is slightly better than our estimate

* Revenue was up 16.0% YoY and down 0.6% QoQ to INR 60,801 Mn (vs CIE est. of INR 59,569 Mn), led by 12.3% YoY growth in volume and 3.3% YoY growth in ASP

* EBITDA was up 20.4% YoY and down 2.8% QoQ to INR 15,137 Mn (vs CIE est. of INR 14,654 Mn). EBITDA margin was up 90 bps YoY and down 57 bps QoQ to 24.9% (vs CIE est. of 24.6%)

* APAT was up 11.6% YoY and up 3.9% QoQ to INR 15,200 Mn (vs CIE est. of INR 14,822 Mn)

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