Eicher Motors shares dip 2% post-Q2 earnings: Analysts flag limited margin upside and other key factors

The maker of Royal Enfield motorcycles reported a net profit of ₹1,369 crore in the second quarter of the current financial year, marking an increase of 24% from ₹1,100 crore in the same period last year.

The Delhi-based two-wheeler marker's revenue from operations advanced 45% to ₹6,172 crore in the July-September period from ₹4,263 crore in the year-ago period.

Eicher Motors reported mixed operational performance, as its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation), also known as operating profit, jumped 39% to ₹1,512 crore in the September quarter as against ₹1,088 crore a year earlier, but its EBITDA margin contracted by 100 basis points to 24.5%.

Royal Enfield recorded its highest-ever quarterly sales of 327,067 motorcycles, up 45% from 225,317 motorcycles sold during the second quarter of the previous financial year.

VE Commercial Vehicles’ (VECV) revenue from operations in the second quarter came in at ₹6,106 crore, up 10.3% from ₹5,538 crore. EBITDA rose 8% to ₹479 crores, from ₹395 crores a year ago. Profit after tax stood at ₹249 crore as against ₹208 crore last year. VECV recorded sales of 21,901 vehicles in the second quarter, up from 20,774 vehicles last year, Eicher Motors said in a press release.

Commenting on the earnings, B. Govindarajan, Managing Director of Eicher Motors and CEO of Royal Enfield, said, “This has been a truly encouraging quarter for Eicher Motors, as we recorded strong performance across the board for both Royal Enfield and VECV. At Royal Enfield, we have continued to deliver steady growth in volumes while further strengthening our growth story quarter after quarter. We witnessed an outstanding festive season, achieving record sales of 2.49 lakh units.”

He added that the new GST reform has made motorcycles under 350 cc more accessible, which has been reflected in strong customer demand.

Vinod Aggarwal, MD and CEO of VECV and Vice Chairman of Eicher Motors, said that GST rationalisation has boosted consumer confidence and consumption, which he believes will help support demand for commercial vehicles in the coming period.

Here’s what analysts said

Kotak Securities, in its note, said the quarter was broadly in line and expects Eicher Motors’ volume growth to remain strong in the coming quarters. However, it believes ASPs and profitability will stay below expectations, while valuations at 34x one-year forward earnings for the domestic 2W business remain expensive.

Eicher Motors’ Q2 EBITDA came in slightly below Morgan Stanley’s estimates, though the global investment bank expects demand momentum to stay strong. It noted that incremental margin upside appears limited, with the company already operating near full capacity, and said that upcoming price hikes will be important to monitor.

Further, analysts at Citi said Eicher Motors’ Q2 results were slightly below expectations. They have trimmed margin estimates due to a weaker product mix and rising marketing costs, noting that growth is likely to come from lower-end models, which could weigh on ASPs and margins.

Eicher Motors share price

At 11:20 AM, Eicher Motors shares were trading at ₹6,723.50 apiece on NSE, declining 1.92%.

In a month, shares of the firm have slipped over 2%, while for six months’ time, they have risen over 23%.

Since the beginning of 2025, Eicher Motors shares have zoomed 37.5%. The company has a market capitalisation of ₹1.84 lakh crore.

Shares of the company had touched their one-year high of ₹7,122.50 apiece on September 23, 2025, while their 52-week low of ₹4,536.05 was hit on November 13, 2024.