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Strong Operational Quarter: Revenue and EBITDA In Line; PAT Beats, but EBITDA Margins Misses Expectations

* Revenue for Q4FY25 was at INR 52,411Mn up 23.1 YoY and 5.4% QoQ (vs consensus est. at INR 49,773Mn) led by 24.2% YoY growth in volume and 0.9% YoY de-growth in ASP.

* EBITDA for Q4FY25 was at INR 12,577Mn, up 11.4% YoY and 4.7% QoQ (vs consensus est. at INR 12,807Mn). EBITDA margin was down 252 bps YoY and down 16 bps QoQ to 24.0% (vs consensus est. at 24.5%).

* PAT for Q4FY25 was at INR 13,622Mn, up 27.3% YoY and up 16.4% QoQ (vs consensus est. at INR 11,099Mn).

Sustained Premium Leadership and Strong Global Momentum:

Royal Enfield recorded its best-ever annual performance with over 1 million units sold, reinforcing its leadership in the premium motorcycle segment. Domestic volumes grew by 8%, while international sales surged nearly 30% to cross the 100,000 mark, supported by strong traction in key markets like the UK (#1), Argentina (#2), and Brazil (#3). The successful launch of six new models during the year has further diversified its portfolio and strengthened its appeal across geographies. We expect Royal Enfield’s sustained product innovation, growing global presence, and leadership in the mid-size motorcycle segment to support doubledigit growth in volumes and profitability in the medium term.

Record Operational Performance with Market Leadership in LMD Segment:

VECV reported its highest-ever annual sales, delivering over 90,000 trucks and buses in FY25, supported by robust Q4 volumes of 28,675 units. Revenue grew 7.7% YoY to INR 2,35,480Mn, while EBITDA improved 18.4% YoY to INR 20,300Mn. Margin expansion remained a key highlight, with Q4 EBITDA margins improving sharply to 10.5% (vs. 7.8% YoY) and full-year margins at 8.8%. VECV emerged as the market leader in the light and medium-duty (LMD) truck segment (5–18 tons) with a 36% share and achieved a record 37.1% share in Q4 FY25. The company also launched 92 new variants during the year, expanded into the 3–3.5 ton segment with its electric-first Eicher Pro X, and continued developing alternate fuel and EV platforms, enhancing its long-term positioning. We expect the commercial vehicle market to continue growing in the short to medium term, supported by fundamental drivers such as India’s projected 6.5% GDP growth in FY26, strong replacement demand, and increased infrastructure investments.

View and Valuation

We have marginally raised our FY26/FY27 EPS estimates by 2.9%/2.8%, resulting in a revised target price of INR 5,885 (earlier INR 5,385), based on a P/E multiple of 25x on FY27E EPS. Accordingly, we upgrade our rating from ‘HOLD’ to ‘ADD’. Our positive stance is underpinned by strong growth potential in the motorcycle segment driven by new product launches, along with a gradual recovery in the CV segment

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