Motilal Oswal: Eicher Motors - Royal Enfield Ready To Capitalize On Next Product Cycle As Situation Normalizes

Motilal Oswal Report

Eicher Motor Ltd.’s FY20 Annual Report highlights Royal Enfield’s (RE) readiness for the next product cycle.

With launch of BS-6 models, RE has achieved technical parity with other bikes. Further, launch of RE ‘Studio’ stores has substantially increased its reach in newer markets.

Eicher Motors has further demonstrated its seriousness to grow RE exports by rapidly expanding exclusive RE stores (from 35 to 77 stores in FY20) along with the launch of the 650 Twins and geo-fenced website in respective markets.

Sailing through times of Covid-19; Strong outlook ahead - The company estimates Covid-19 disruption recovery to be gradual.

However, it also expects personal transportation demand to grow and benefit the industry as many people are now wary of using public transport due to the Covid crisis.

The Company is confident of sailing through these tough times on the back of

(a) solid balance sheet and cash position, (b) robust business model with focused and cash-optimized approach, (c) strong line-up, (d) retail footprint, and (e) an exceptional management team at RE and Volvo Eicher commercial vehicles (VECV).

It is further building accessibility through various solutions – both digital and financial – and is confident of capitalizing demand as the situation stabilizes.

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