EQUITY

RESEARCH
REPORT
EICHER MOTORS LTD
NSE:EICHERMOT BSE:505200

FMA SRCC X FMA HANSRAJ

Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Equity Research Report - Academic Project

Eicher Motors Limited (EML) is a prominent player in the Indian

automotive sector, primarily recognized for its iconic Royal CMP
Enfield motorcycles and a solid presence in the commercial 5058.45
vehicle market. This thesis provides a detailed analysis of EML's
financial performance, market dynamics, competitive
STOCK DATA
advantages, growth prospects, and potential risks. The NIFTY 23,951.70
conclusion supports a positive investment outlook for EML based 52 Week High/Low (In INR)
Mkt Cap. (In Crs)
5,105 / 3,562
1,30,761
on its strong fundamentals, strategic initiatives, and favourable O/s shares (In Crs) 27.38
Dividend Yield 1.08%
market conditions.

Financial Performance Analysis STOCK RETURN

Revenue Growth
1 Yr 18.09%
Revenue Trends: For FY 2023-24, EML reported total revenues of 3 Yr 99.34%
₹16,536 crores, reflecting a 14.5% increase from ₹14,442 crores 5 Yr 146.36%

in FY 2022-23. This growth can be attributed to strong demand

for both motorcycles and commercial vehicles.
Quarterly Performance: In Q2 FY 2023-24, EML achieved
revenues of ₹4,256 crores, marking an 11.87% year-on-year
increase. This consistent quarterly growth indicates resilience in
sales despite market fluctuations.
Profitability Metrics
Net Profit: EML's net profit surged to ₹4,001 crores for FY 2023-
24, up 37.3% from ₹2,914 crores in FY 2022-23. This significant
increase reflects effective cost management and operational
efficiencies.
Net Profit Margin: Approximately 24.2%, showcasing the
company's ability to convert revenue into profit effectively.
Key Financial Summary (INR b)
EBITDA Margin: Around 29%, indicating strong operational Y/E March FY 24 FY 25E FY 26E
efficiency and cost control. Sales 165.4 178 195.5
Earnings Per Share (EPS) EBITDA 43.3 46.3 49.8
EPS Growth: Increased to ₹146.18 for FY 2023-24 from ₹106.56 Adj. PAT 40.0 43.4 46.9
in FY 2022-23. This growth enhances shareholder value and Adj. EPS 146.3 158.8 171.3
EPS Gr. (%) 37.3 8.5 7.9
reflects the company's commitment to returning profits to
BV/Sh 660 763 869
investors. Ratios
Operational Efficiency ROE (%) 24.2 22.3 21
Operating Margin: Approximately 22.55%, indicating effective ROCE (%) 24.1 21.5 20.6
management of costs relative to revenue.
Return on Capital Employed (ROCE): The ROCE stands at around
LTP: 5058.45
18%, demonstrating the company's ability to generate returns
from its capital investments.

SHARE HOLDING PATTERN

Promotors 49.10%
FII's 27.61%
DII's 13.67%
Government 0.10%
Retail Investors 9.52%
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Market Position and Competitive Advantage

Strong Brand Equity
Royal Enfield is one of the most recognized motorcycle brands in India and abroad:
Brand Loyalty: The brand has cultivated a dedicated customer base that values its heritage and
lifestyle appeal.
Market Share: As of late 2023, Royal Enfield holds approximately 35% of the mid-size motorcycle
segment (250cc - 750cc) in India.
Diverse Product Portfolio
Motorcycles: The introduction of new models like the Hunter 350 caters to evolving consumer
preferences for style and performance.
Commercial Vehicles: EML's focus on medium and heavy-duty trucks positions it well in a growing
segment driven by infrastructure development.
Strategic Partnerships
Technology Transfer: Access to advanced technology and global best practices strengthens EML's
product offerings in commercial vehicles.
Market Reach: This partnership with Volvo allows EML to leverage Volvo’s extensive distribution
network to expand its reach in both domestic and international markets.

Growth Prospects
Expansion Plans
New Product Launches: Continued innovation with new models tailored for emerging consumer
preferences (e.g., electric variants).
Market Penetration: Plans to increase penetration in rural markets where motorcycle ownership is
growing.
Infrastructure Development: With India's focus on infrastructure development (e.g., roads,
highways), demand for commercial vehicles is expected to rise significantly.
Product Diversification: Introduction of new models catering to different industries (e.g.,
construction, logistics).
Electric Vehicle (EV) Initiatives
Investment in EV Technology: EML is investing in electric vehicle technology and hybrid models to
align with global trends.
Government Policies: Favorable government policies promoting electric vehicles could provide
additional tailwinds for growth.
International Expansion
Export Markets: Plans to strengthen its presence in international markets such as North America,
Europe, and Southeast Asia where demand for premium motorcycles is growing.
Local Partnerships: Exploring partnerships with local distributors to enhance market entry strategies.

Valuation Considerations
Current Valuation Metrics
P/E Ratio: Approximately 24.9x based on FY2024 estimates.
EV/EBITDA Ratio: Around 21.7x.
These metrics suggest that EML is undervalued compared to historical averages and peers within the
automotive sector, providing potential upside as market sentiment improves.
Discounted Cash Flow (DCF) Analysis
A DCF analysis indicates that EML's intrinsic value per share could be significantly higher than its
current trading price when factoring in projected revenue growth rates of approximately 12%
annually over the next five years, along with stable profit margins.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Risks and Challenges

Economic Fluctuations
Economic downturns could adversely affect consumer spending on discretionary items like
motorcycles and commercial vehicles.
Competitive Landscape
Intense competition from domestic manufacturers (e.g., Bajaj Auto, Hero MotoCorp) and
international players (e.g., Honda, Yamaha) could pressure margins and market share.
Regulatory Changes
Changes in government regulations regarding emissions standards or safety requirements could
impact production costs and operational efficiency.
Supply Chain Disruptions
Global supply chain disruptions due to geopolitical tensions or pandemics could affect production
timelines and costs.

Eicher Motors Limited stands out as a robust investment opportunity characterized by strong
financial performance, strategic market positioning, and promising growth prospects in both its
motorcycle and commercial vehicle segments. The company's commitment to innovation,
operational efficiency, strategic partnerships, and expansion initiatives enhances its competitive
advantage in an evolving automotive landscape.
Given these factors—strong brand equity, diversified product portfolio, healthy financials, favourable
market conditions for both motorcycles and commercial vehicles—investors may consider adding
EML to their portfolios for potential capital appreciation and dividend income as it continues to
navigate the challenges of the automotive industry while capitalizing on growth opportunities ahead.
In conclusion, Eicher Motors Limited represents not just an investment but an opportunity to
participate in the dynamic evolution of India's automotive landscape as it gears up for future
challenges while staying committed to sustainable growth strategies that align with global trends
towards electrification and innovation.

Management Information

Siddharth Lal Ms. Vidhya Srinivasan

Managing Director, Chief Executive Officer Chief Financial Officer

Govindarajan Balkrishan Atul Sharma

Whole time Director, CEO (Royal Enfield) CS, Compliance Officer

Director Information

S Sandilya Inder Mohan Singh

Chairman & Independent Director Independent Non Exe. Director
7.8M 2024 3.4M 2024
Gross Remuneration year Gross Remuneration year

Manvi Sinha Siddharth Lal

Independent Non Exe. Director Managing Director
3.5M 2024 3.1M 2024
Gross Remuneration year GROSS REMUNERATION year

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
COMPANY OVERVIEW

History
With its headquarters in New Delhi, Eicher Motors Limited is a multinational automotive manufacturer
based in India producing motorbikes and commercial vehicles. The company's history is lengthy and
dynamic, filled with noteworthy partnerships and commercial endeavors.
1948: the foundation of The Goodearth Company, which was responsible for the service and
distribution of foreign tractors.
1959: Incorporation of the Eicher Tractor Corporation of India Private Ltd, a joint venture with the
German Eicher tractor manufacturer that signaled the company's debut into the tractor manufacturing
industry.
1960: The company’s name changed to Eicher Tractors India Ltd.
1965: Eicher completely transferred to Indian hands as its shareholders became Indian nationals.
1970–1973: In 1970, Massey Ferguson purchased a 30% share in the German tractor manufacturer
Eicher, and by 1973, the firm had been completely acquired.
1982: The incorporation of Eicher Motors Limited and the signing of a cooperation agreement to
produce light commercial vehicles (LCVs), which were marketed under the "Eicher Mitsubishi" brand.
1990: Enfield India Ltd. saw a 26% acquisition from Eicher Goodearth.
1993: Eicher Motors acquire overall control of Royal Enfield India by raising its ownership position to
60%.
2008: Eicher and the Volvo Group formed VE Commercial Vehicles Limited
2018: Royal Enfield introduced the Continental GT 650 and the Interceptor INT 650.
2019: Royal Enfield began transitioning to BS VI emission standards while expanding its retail footprint
by launching studio stores.
Product Lines:
The business activities of the Eicher Group are broad and include truck, bus, motorcycle, automotive
gears, and component design, development, manufacture, and marketing on a national and worldwide
scale. A joint venture between the Volvo Group and Eicher Motors Limited, called VE Commercial
Vehicles (VECV) Limited have five business units within VECV.

Trucks and Buses Eicher

Eicher offers an extensive lineup of vehicles, including tippers, tractor trailers, and light, medium, and
heavy-duty models.
Notable options are ‘Pro 2049, Pro 6041, and Pro 8055. There are also available CNG-powered trucks,
such as the Pro 2059 CNG.’
India's Volvo Trucks: VECV and Volvo Group work closely together to design, develop, and test the Pro
8000 series of trucks.
Offering a wide selection of light, medium, and heavy-duty vehicles is Eicher vehicles.
Eicher Buses: Meets a range of needs for passenger transportation.
VE Powertrain is a company that specializes in producing cutting-edge engines and powertrains for
trucks.
Engineering Design and Components: Offers creative engineering solutions and premium components.
Manages the distribution and sales of Volvo commercial trucks in India under the name Volvo Trucks.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Royal Enfield

Royal Enfield offers a variety of modern, classic, and adventure motorbike product lines, which
comprise:
The Interceptor 650 is a parallel twin-powered, retro-styled roadster motorbike that's made to travel
down the interstate with ease.
The Continental GT 650: Faster, sportier motorbike with a twin-engine modeled after a cafe racer.
Bullets: The Bullet, one of the most popular motorcycle models ever made, is a classic with a
traditional and tough look that delivers the expected dependability and usefulness.
Traditional: This series is renowned for its retro-styled models that offer modern performance along
with traditional styling and a riding experience.
Thunderbird: Cruiser motorcycles are long-distance touring bikes that provide a comfortable ride.

Business Model

Eicher Motors is an automobile firm that primarily focuses on trucks and buses, or commercial
vehicles. The corporation is still primarily in the commercial vehicle market.
However, certain consumers of the Royal Enfield motorcycle brand, which Eicher Motors regularly
carries, may view some of its unnoticed work in the consumer retail products industry as questionable.

As a result, even though the manufacturing and automotive sectors may be the primary emphasis of
Eicher Motor's overall business strategy, certain of its components may also be related to other
sectors, such as the tractor and motorcycle industries. As a result, Eicher Motors' business model may
be classified as manufacturing or automobile.
Royal Enfield and VE Commercial Vehicles (VECV), two successful firms under the parent company of
Eicher Motors, are driving growth in the motorcycle and commercial vehicle sectors. Royal Enfield's
motorcycles have managed to drive sales growth of 9% to 9,12,732 units, with a 14% increase in the
domestic market. From bustling Indian cities to iconic American highways, Royal Enfield’s motorcycles
are seen crossing diverse terrains. With 18 company-owned stores and more than 850 dealers in India,
it caters to its domestic crowd, while its presence in over 60 countries, including well-established
markets like the U.S., UK, regions of Europe and Latin America, Middle East, and Southeast Asia,
showcases its global appeal.
Sales of VECV vehicles rose 7.5% to 85,560, while sales of trucks and buses with the Eicher brand saw a
23.1% increase. Volvo trucks and buses saw a 63.8% rise in sales.

Manufacturing & Networks

Eicher Motor Limited (EML) operates two significant manufacturing facilities located in Chennai, in
Thiruvottiyur and Vallam Vadagal, by locally sourcing 69% of its raw material in support of the local
market, to meet the increasing demand for Royal Enfield motorcycles and commercial vehicles on a
national and international scale.
Eicher has developed long-standing relationships with local vendors, ensuring a stable supply of high-
quality materials. The company's commitment to local sourcing also aligns with the Indian
government’s "Make in India" initiative, promoting indigenous manufacturing.

Distribution Strategy
The distribution strategy that Eicher Motors typically use for its motorcycles and commercial vehicles is
multi-channel. They sell fleet operators directly as well as through dealerships for commercial cars.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Motorcycles made by Royal Enfield are offered online, through franchises, and through company-
owned storefronts.
Approximately 80% of commercial vehicle sales in a recent fiscal year were credited to dealerships,
with the other 20% being sold directly to fleet operators. Royal Enfield motorbike sales have increased
significantly thanks to company-owned and franchised locations. Franchises account for between 60
and 70 % of Royal Enfield sales, offering a robust local presence and customer service. Online and
company-owned channels account for the remaining sales.

Distribution Channel

Franchises

Fleet Operators

Dealership

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9

Royal Enfield Commercial Vehicles

Revenue Streams

Eicher Motors boasts a diversified revenue stream, encompassing not just vehicles but also related
accessories and spare parts, giving them a diverse business source. But the two-wheeler industry,
which generated an astounding 75% of their total revenue in the most recent period, is their main
source of revenue. The venerable Royal Enfield brand, a significant bulwark for Eicher Motors,
dominates this market.
Even while two-wheelers are the most common, other segments also play a role: Passenger Vehicles:
VECV's offers account for the majority of the company's 18% income from passenger vehicles. Light
commercial vehicles, such as vans or small trucks, may fall under this category. Commercial Vehicles:
Traditional heavy commercial vehicles, such as trucks and buses, account for 4.5% of revenue. Here's a
summary to help you understand: 75% of Royal Enfield two-wheelers Vehicles Used for Passage
(VECV): 18% Vehicles Used for Business: 4.5%.

0.75

0.18

0.045 0.025

Two Wheelers Passenger Vehicles Commercial Vehicles Others

Major Strategic Partners

Partnership with Enfield India

In 1990, Eicher Motors Ltd. made a pivotal move by acquiring a 26% stake in Enfield India. Both
businesses benefited greatly from this acquisition, which resulted in Enfield India's 1994 rebranding as
Royal Enfield Motors Ltd.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Venture with AB Volvo
2008 featured the formation of Volvo Eicher Commercial Vehicles Limited (VECV), a strategic joint
venture between AB Volvo and Eicher Motors Ltd. This deal affirmed Eicher's ambition to operating
globally in the search for creative and effective transportation solutions. The 2010 production of the VE
series of heavy-duty trucks was made possible by VECV, solidifying Eicher's standing as a market leader
in commercial vehicles. In addition, this joint venture established a cutting-edge production plant in
Pithampur, Madhya Pradesh, which now acts as the Volvo Group's global centre for medium-duty five-
and eight-litre engines.

PESTEL Analysis

1) Government regulations 1) Eicher Motors has a 1) As Eicher Motors

pertaining to emissions, competitive advantage enters international
safety, and fuel economy because of the markets, safeguarding its
have an immediate effect on tremendous brand loyalty designs, technology, and
how the business operates. that Royal Enfield enjoys intellectual property is
both in India and essential to preventing
2) Adjustments in
worldwide. But changing breach and preserving its
import/export taxes and GST
consumer attitudes about competitive edge.
may have an impact on the
technologically advanced
price and cost structure of 2) Conformity to
motorcycles or the entry of
the business. environmental laws.
new rivals could affect
market share.

Political Economic Social Technological Legal Environmental

1) The demand for 1) Smart Production 1) Greener transportation

motorbikes and commercial In the automobile industry, alternatives are becoming
vehicles may decline as a automation, robotics, and more and more in demand as
result of slowing economies, data analytics are becoming worries about climate change
more commonplace. and environmental
inflation, or shifts in
sustainability grow
consumer expenditure. 2) Whilst Eicher has already
adjusted to India's BS VI 2) In addition to expanding its
2) Cost variations for emission standards, it will still range of electric cars (EVs),
essential raw materials like need to keep improving its they must continue to
steel and aluminium can technologies in order to emphasize environmentally
have an effect on production comply with upcoming friendly manufacturing
costs and profitability. international standards and practices such as waste
emission regulations. minimization and energy
efficiency.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Geographic Presence

Eicher Motors has 3 key manufacturing plants in India namely:

1. Thiruvottiyur Plant: The Thiruvottiyur facility primarily focuses on plating and auto buffing
operations.
2. Oragadam Plant: The Oragadam plant is one of the largest production facilities for Eicher Motors
with a production capacity of 600,000 motorcycles per annum.
3. Vallam Vadagal Plant: The Vallam Vadagal plant also boasts a production capacity of 600,000
motorcycles per annum, identical to the Oragadam facility.
The brand is currently running on a capacity utilization of 77.35% and it has been increasing trend
which shows that the company has a growing audience and it is confident that it will be able to cater to
more and more people domestically and internationally.
Royal Enfield, holds a significant position in the Indian premium motorcycle market, particularly in the
mid-size segment. Let’s look at a detailed breakdown of its market share across various segments:
1. Mid-Size Motorcycle Segment (250cc - 750cc):Royal Enfield holds an 88.5% market share in the mid-
size motorcycle segment in India.
2. PST Segment (Power, Style & Technology - Engine Size > 125cc): In the PST segment, which
represents motorcycles with an engine size greater than 125cc, Royal Enfield maintains a 29.7% market
share.
3. Overall Indian Motorcycle Market: Across the broader Indian motorcycle market, Royal Enfield
accounts for a 6.4% market share.

35% Market Share of Eicher Motors

30%

25%

20%

15%

10%

5%

0%
1 2 3 4 5 6 7 8 9 10 11 12

Series1 Series2

The brand boasts an extensive retail network in India with over 2000 retail outlets pan India, with 1102
Exclusive Stores and 901 Studio Stores.

VECV's manufacturing in India includes:

Pithampur, MP: Produces 90,000 trucks annually, with an engine plant (80,000 engines/year) and a
parts distribution center.
Baggad, MP: Bus body facility with a 15,600-bus capacity, expandable to 19,200.
Bhopal, MP: New facility for 40,000 trucks/year, scalable to 100,000.
Dewas, MP: Manufactures gears and engineering components for VECV and other automakers.
Bengaluru, Karnataka: Volvo bus plant has a 2,000-bus annual capacity for premium buses, serving
domestic and export markets.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Touchpoints Globally
1000
900
800
700
600
500
400
300
200
100
0
1 2 3 4 5 6 7

Series1 Series2 Series3 Series4

VE Commercial Vehicles (VECV) has seen substantial growth across various segments in the
commercial vehicle industry in India. The following is a breakdown of VECV's market share across
different commercial vehicle segments:
1. Light & Medium Duty Trucks (5 to 18.5 Tonnes): Market Share: 34% (up from 31.5%), Units Sold:
40,559 in FY 2023-24, Growth Drivers: E-commerce demand and new models like Eicher Pro 2109
Turbo+ CNG and Pro 2055 EV.
2. Heavy Duty Trucks (18.5 Tonnes+): Market Share: 9% (up from 8.3%), Units Sold: 21,529 in FY 2023-
24, Growth Drivers: Infrastructure spending, mining, and efficient logistics.
3. Buses (Eicher & Volvo): Market Share: 20.3% (down from 21.0%), Units Sold: 17,620 in FY 2023-24,
Growth Drivers: Increased mobility and focus on electric buses, like Eicher Skyline Pro-E.
4. Volvo Trucks (Premium Segment): Market Share: 95.3%, Units Sold: 2,131 in FY 2023-24, Growth
Drivers: Strong in mining and transportation, with electric and LNG trucks.
5. Small Commercial Vehicles (2 to 3.5 Tonnes):New Segment: Introduced at Bharat Mobility Expo 2024
with plans for electric, CNG, and diesel variants for last-mile delivery.

International Volumes
No. of Units Sold
89226

77209
74238

38622
35675

20825

1 2 3 4 5 6

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Around 950 touchpoints Globally
First let’s look at Royal Enfield. Royal Enfield has expanded into over 65 countries worldwide
· North America: United States, Canada
· Europe: United Kingdom, France, Germany, Netherlands, Spain, Italy, and Belgium
· Latin America: Argentina, Brazil, Colombia, Mexico
· Asia-Pacific: Thailand, Indonesia, Japan, Australia, New Zealand, South Korea, Vietnam
· Middle East & Africa: United Arab Emirates, Israel, Morocco

Changing Trend in Stores

0 500 1000 1500 2000 2500

Series1 Series2

Number of Outlets: Americas: Exclusive Stores: 104 Multi Brand outlet: 220 UK, MEA and Europe:
Exclusive Stores: 80 Multi Brand Outlet: 508 APAC: Exclusive Stores: 56 Multi Brand Outlets: 116
Here are the current CKD facilities:
Argentina (Buenos Aires): CKD assembly plant serving the growing Latin American market.
Brazil: CKD unit supporting expansion in the strategic Latin American market for mid-sized
motorcycles.
Thailand: CKD facility driving Royal Enfield's growth in Southeast Asia, a key hub for the Asia-Pacific
region.
Colombia: CKD unit boosting competitiveness and growth in the Andean and Latin American markets.
Nepal: CKD facility targeting South Asia, with strong demand for adventure motorcycles like the
Himalayan.
Now let’s look at the JV side of business. VE Commercial Vehicles (VECV) exports its products to various
regions outside India, focusing on emerging markets. Here's a detailed breakdown of the regions
where VECV sells its products internationally:
South Asia: Strong presence in Nepal, Bangladesh, and Sri Lanka, with high demand for light and
medium-duty trucks.
Middle East & Africa: Expanded into UAE, South Africa, Egypt, and Nigeria, with a Parts Distribution
Centre in the UAE to support the region.
Latin America: Exports trucks and buses to Brazil, Colombia, and Argentina, targeting durable vehicle
demand.
Southeast Asia: Growing in Thailand, Indonesia, and the Philippines, driven by rising logistics and
public transport needs.
Africa: Focus on Kenya, Tanzania, and Nigeria, introducing market-specific vehicle variants with
positive customer response.
Strategic Initiatives

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Eicher Motors Ltd.
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EV Expansion: Scaling up production of electric trucks and buses like the Eicher Pro EV series and
Skyline Pro-E to meet rising demand for sustainable transport.
Global Expansion: Increasing CKD assembly plants in Latin America, Southeast Asia, and Africa, offering
region-specific products to strengthen its global presence.
Sustainability & Alt Fuels: Investing in CNG, LNG trucks as part of a sustainability push to lower carbon
emissions.
Digital Transformation: Integrating telematics and data analytics for enhanced fleet management,
predictive maintenance, and customer service.
Capacity Expansion: Boosting production capacity at Bhopal and Pithampur to meet growing demand
for trucks.
Product Diversification: Expanding into small commercial vehicles (SCV) and mid-size motorcycles via
Royal Enfield.
Premium Motorcycles: Focusing on premium and adventure motorcycles for domestic and global
markets through Royal Enfield.

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Eicher Motors Ltd.
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INDUSTRY OVERVIEW

Global Market
Annual Global Vehicle Sales
1) In 2023, global vehicle sales grew almost 11%
120
2) Globally, vehicle sales are projected to increase between
2.5% and 3.0% in 2024, followed by another year of projected 100
modest growth of around 2.0% to 2.5% in 2025. 80
3) China, the largest market in the world, grew considerably at
60
12%.
40
The U.S. rebounded after a poor 2022 with a 13% increase in
sales. India remained the third largest single-country car market 20
with 8% growth and 4.1 million units sold. 0
4) The sector currently employs 16.7 million people globally,
reflecting its vast scale and integral role in the world’s economy.
This workforce figure becomes more impressive when
considering the employee growth over the last year, where an Number of Automobiles Produced
additional 753 thousand individuals have found employment in (in million)
the sector. 35
5) Global car sales increased to nearly 90 million units in 2023 , 30
up from 81 million in 2022 and the highest level seen since 25
20
India's Position 15
1) India enjoys a strong position in the global heavy vehicles 10
market as it is the largest tractor producer, second-largest bus 5
0
manufacturer, and third-largest heavy truck manufacturer in the
FY18 FY19 FY20 FY21 FY22 FY23 FY24
world.
2) India’s annual production of automobiles in FY23 was 25.9
million vehicles. Number of Automobiles Sold in
3) In April 2024, the total production of passenger vehicles, India (in million)
three-wheelers, two-wheelers, and quadricycles was 23,58,041 30
units. 25
4) In FY23, total automobile exports from India stood at
20
47,61,487. This sector's share of the national GDP increased
from 2.77% in 1992-1993 to around 7.1% presently. It employs 15
about 19 million people directly and indirectly. 10
5) 7.1% Share in India's GDP
5
37 Mn Employment generated
40% Share in global R&D 0
FY18 FY19 FY20 FY21 FY22 FY23 FY24
4.7% Share in India's exports

Government Inititatives
The Government of India encourages foreign investment in the automobile sector and has allowed 100%
Foreign Direct Investment under the automatic route. Some of the recent initiatives taken by the Government
of India are:
1) Ministry of Heavy Industries, Government of India with the approval of Department of Expenditure has
launched Electric Mobility Promotion Scheme 2024 to further accelerate the adoption of EVs in the country
which is a fund limited scheme with a total outlay of Rs. 500 crore for the period of 4 months, from 1st April
2024 to 31st July 2024.
2) In January 2024, the Ministry of Heavy Industries extended the tenure of the Production Linked Incentive
(PLI) Scheme for Automobile and Auto Components by one year. The incentive will now be applicable for a
total of five consecutive financial years, until March 31, 2028.

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Eicher Motors Ltd.
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total of five consecutive financial years, until March 31, 2028.
3) Under Electric Mobility Promotion Scheme 2024 government aims to support 3,72,215 EVs including e-2W
(3,33,387) and e-3W (38,828 including 13,590 rickshaws & e-carts and 25,238 e-3W in L5 category).

Mergers & Acquisitions

Mergers and acquisitions (M&A) play a crucial role in achieving key business objectives, such asentering new
markets or advancing technology, especially in the automotive industry. These deals cansignificantly impact
investors, employees, and consumers, affecting stock performance, job security,and the introduction of new
car features. The following are some major mergers across the past years in the industry, which bear great
impact:

1) Ford and Jaguar (1989)

M&A Activity in the Indian Automotive Industry
Deal Value - $2.5 B (by deal volume)- Q4 2021 to Q1 2024
This is the first on the list of major strategic mergers. By
acquiring Jaguar, Ford marked a significant expansion of its
luxury vehicle portfolio, as part of its broader strengthening of
its luxury brand offerings as Ford again purchased the Rover
brand name from BMW in 2006.
In 2008 however, Ford sold both Jaguar and Land Rover to Tata
Motors for $2.23Bn
2) Daimer-Benz and Chrysler
Deal Value: $38 Billion
M&A Activity in the Indian Automotive Industry
This key automotive deal was termed as a ‘merger of equals’. It (by deal value)- Q4 2021 to Q1 2024 (in $m)
was the largest cross border merger ever at that time. The
merger allowed Daimler-Benz’s non-automotive divisions to
continue operating independently and pursue their growth
strategies.
3) Nissan and Mitsubishi Motors (2016)
Deal Value: $2.3 billion
In 2016, Nissan Motor Co. acquitted a 34% stake in Mitsubishi
Motors, becoming its largest shareholder, as part of a strategy
to enhance global alliance between Nissan, Mitsubishi Motors
and Renault, creating one of the world’s top three automotive Source: GlobalData Automative Intelligence Center
groups with annual sales reaching 10 million vehicles.
4) Porsche and Volkswagen (2012) Top 5 M&A Deals by value in since 2023
Deal Value: Unknown
Though founded by the same visionary, Ferdinand Porsche, the TARGET AQUIRER DEAL VALUE
companies had a complex relationship. Porsche made
aggressive moves to acquire Volkswagen, which eventually Samvardhana Undisclosed $543M
executed a reverse takeover of Porsche. Volkswagen effectively Motherson
absorbed Porsche. This process included legal disputes and International
governance issues, showcasing differences between German Sakthi Auto ABT Transport $83M
and US corporate laws. Component
5) Fiat Chrysler Automobiles (FCA) and French PSA Group Undisclosed International $73M
(2021) Finance
Deal Value: $52 Billion Pricol Minda $48M
Stellantis N.V is an automotive corporation formed in 2021 post Halvad Adani Energy
the merger of the two companies, and quickly became the Transmission Solutions $36M
world’s 4th largest automotive business by sales. It continues to Source: GlobalData Automative Intelligence Center
expand its portfolio through strategic acquisitions of Share Now

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
and aiMotive. In 2023, Stellantis acquired a 20% stake in
Chinese electric vehicle maker Leapmotor.

In the Indian automotive industry, 11 M&A deals were announced in Q1 2024, worth a total value of
$560.7m, according to GlobalData’s Deals Database. The $11.6m minority acquisition of 3EV Industries by
Mahanagar Gas was the industry’s largest disclosed deal.
In value terms, M&A activity in India increased by 200% in Q1 2024 compared with the previous quarter’s
total of $186.7m and rose by 122% as compared to Q1 2023. Related deal volume decreased by 27% in Q1
2024 versus the previous quarter and was 31% lower than in Q1 2023. The top-ranked financial advisors
supporting these M&A deals in India in Q1 2024 were HDFC Bank; KDA Corporate Advisors; S&P Global with
1, 1, 1 deals respectively.

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Financials and Valuations

Eicher Motors Ltd. - Historical Income Statement (INR Crores)

Figures in ₹ Cr 2021A 2022A 2023A 2024A 2025F 2026F 2027F 2028F 2029F
Sales 8,720.35 10,297.83 14,442.18 16,142.00 17,637.83 19,275.59 21,068.92 23,032.77 25,183.55
Growth Rate -4.73% 18.09% 40.24% 11.77% 9.27% 9.29% 9.30% 9.32% 9.34%

Cost of Sales 6,261.01 7,167.90 9,689.90 10,700.98 12,116.79 13,241.89 14,473.86 15,822.98 17,300.52
Gross Profit 2,459.34 3,129.93 4,752.28 5,441.02 5,521.05 6,033.70 6,595.05 7,209.78 7,883.03
GP Margins 28.20% 30.39% 32.91% 33.71% 31.30% 31.30% 31.30% 31.30% 31.30%

Other Operating Expenses 676.11 952.36 1,306.56 1,505.43 1,635.94 1,796.17 1,974.72 2,172.71 2,391.47

Depreciation and Amortisation 450.73 451.93 526.21 597.60 669.21 723.03 778.85 837.53 899.86
Depreciation 350.00 356.00 411.00 430.00 470.41 514.08 561.91 614.29 671.65
Amortisation 100.73 95.93 115.21 167.60 198.80 208.95 216.94 223.24 228.21

EBIT 1,332.50 1,725.64 2,919.51 3,337.99 3,215.89 3,514.51 3,841.48 4,199.55 4,591.70
EBIT Margins 15.28% 16.76% 20.22% 20.68% 18.23% 18.23% 18.23% 18.23% 18.23%

Interest Expenses 16.45 18.78 28.02 50.88 55.94 61.62 69.72 83.56 94.83

Tax Rates (%) 25.11% 23.88% 23.31% 25.85% 26.68% 27.51% 28.34% 29.17% 30.00%
PBT 1,316.05 1,706.86 2,891.49 3,287.11 3,159.95 3,452.88 3,771.76 4,115.99 4,496.87
Tax Expenses 330.40 407.56 674.00 849.82 843.15 949.95 1,068.96 1,200.66 1,349.06

PAT 985.65 1,299.30 2,217.49 2,437.29 2,316.80 2,502.93 2,702.80 2,915.33 3,147.81
PAT Margins 11.30% 12.62% 15.35% 15.10% 13.14% 12.98% 12.83% 12.66% 12.50%

Eicher Motors Ltd. - Historical Balance Sheet (INR Crores)

Balance Sheet Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

Equity Share Capital ₹ 27.3 ₹ 27.3 ₹ 27.3 ₹ 27.3 ₹ 27.3 ₹ 27.4 ₹ 27.4
Reserves ₹ 7,002.8 ₹ 8,891.4 ₹ 9,953.6 ₹ 11,410.8 ₹ 12,580.7 ₹ 14,962.9 ₹ 18,018.2
Borrowings ₹ 150.8 ₹ 186.8 ₹ 249.0 ₹ 219.3 ₹ 107.7 ₹ 288.4 ₹ 419.4
Other Liabilities ₹ 2,341.3 ₹ 2,281.4 ₹ 2,219.8 ₹ 2,901.3 ₹ 3,424.1 ₹ 3,919.0 ₹ 4,650.2
Total Liabilities ₹ 9,522.2 ₹ 11,386.8 ₹ 12,449.7 ₹ 14,558.6 ₹ 16,139.8 ₹ 19,197.6 ₹ 23,115.1

Fixed Asset Net Block ₹ 1,501.7 ₹ 1,874.6 ₹ 2,377.5 ₹ 2,433.3 ₹ 2,424.3 ₹ 2,690.0 ₹ 2,914.4
Capital Work in Progress ₹ 333.2 ₹ 449.7 ₹ 312.2 ₹ 314.3 ₹ 504.8 ₹ 472.1 ₹ 555.1
Investments ₹ 5,580.8 ₹ 4,922.5 ₹ 5,748.8 ₹ 3,902.1 ₹ 7,720.6 ₹ 12,320.7 ₹ 13,527.0
Other Assets ₹ 431.9 ₹ 457.0 ₹ 401.6 ₹ 1,045.8 ₹ 1,333.3 ₹ 1,302.0 ₹ 4,189.0
Total Non Current Assets ₹ 7,847.6 ₹ 7,703.9 ₹ 8,840.0 ₹ 7,695.5 ₹ 11,982.9 ₹ 16,784.7 ₹ 21,185.4

Receivables ₹ 68.0 ₹ 84.3 ₹ 86.8 ₹ 158.2 ₹ 302.0 ₹ 368.9 ₹ 373.8

Inventory ₹ 394.6 ₹ 633.4 ₹ 572.4 ₹ 874.6 ₹ 1,132.4 ₹ 1,278.4 ₹ 1,409.6
Cash & Bank ₹ 1,212.0 ₹ 2,965.3 ₹ 2,950.6 ₹ 5,830.4 ₹ 2,722.5 ₹ 765.6 ₹ 146.3
Total Current Assets ₹ 1,674.6 ₹ 3,683.0 ₹ 3,609.7 ₹ 6,863.1 ₹ 4,156.9 ₹ 2,412.9 ₹ 1,929.7

Total Assets ₹ 9,522.2 ₹ 11,386.8 ₹ 12,449.7 ₹ 14,558.6 ₹ 16,139.8 ₹ 19,197.6 ₹ 23,115.1

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Eicher Motors Ltd. - Historical Cash Flow Statement (INR Crores)

Cash Flow Statement Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Operating Activities
Profit from operations ₹ 28,840.0 ₹ 33,312.0 ₹ 28,771.0 ₹ 23,352.0 ₹ 31,198.0 ₹ 26,943.0 ₹ 41,694.0
Receivables ₹ (4,152.0) ₹ (10,688.0) ₹ (9,109.0) ₹ 9,950.0 ₹ (5,505.0) ₹ 185.0 ₹ (2,213.0)
Inventory ₹ (6,621.0) ₹ (3,560.0) ₹ 2,069.0 ₹ 2,326.0 ₹ 3,814.0 ₹ 472.0 ₹ (5,665.0)
Payables ₹ 9,301.0 ₹ 7,320.0 ₹ (4,692.0) ₹ (8,085.0) ₹ 5,748.0 ₹ (7,012.0) ₹ 6,945.0
Loans Advances - - - - - - -
Other WC items ₹ 4,727.0 ₹ 494.0 ₹ 4,512.0 ₹ 875.0 ₹ (4,150.0) ₹ (4,396.0) ₹ (2,194.0)
Working capital changes ₹ 3,254.0 ₹ (6,434.0) ₹ (7,221.0) ₹ 5,065.0 ₹ (93.0) ₹ (10,750.0) ₹ (3,127.0)
Direct taxes ₹ (1,895.0) ₹ (3,021.0) ₹ (2,659.0) ₹ (1,785.0) ₹ (2,105.0) ₹ (1,910.0) ₹ (3,179.0)
Cash from Operating Activities ₹ 33,454.0 ₹ 17,423.0 ₹ 11,671.0 ₹ 31,698.0 ₹ 28,907.0 ₹ 3,532.0 ₹ 32,261.0

Investing Activities
Fixed assets purchased ₹ (16,072.0) ₹ (35,079.0) ₹ (35,304.0) ₹ (29,702.0) ₹ (20,205.0) ₹ (15,168.0) ₹ (19,230.0)
Fixed assets sold ₹ 53.0 ₹ 30.0 ₹ 67.0 ₹ 171.0 ₹ 351.0 ₹ 230.0 ₹ 285.0
Investments purchased ₹ (6.0) ₹ (329.0) ₹ (130.0) ₹ (1,439.0) ₹ (7,530.0) ₹ (3,008.0) ₹ (50.0)
Investments sold ₹ 1,965.0 ₹ 2,381.0 ₹ 5,644.0 ₹ 21.0 ₹ 226.0 ₹ 104.0 ₹ 6,895.0
Interest received ₹ 638.0 ₹ 690.0 ₹ 761.0 ₹ 1,104.0 ₹ 428.0 ₹ 653.0 ₹ 973.0
Dividends received ₹ 620.0 ₹ 1,797.0 ₹ 232.0 ₹ 21.0 ₹ 18.0 ₹ 32.0 ₹ 46.0
Invest in subsidiaries - - - - - - -
Investment in group cos ₹ (107.0) ₹ (4.0) ₹ (9.0) ₹ (606.0) ₹ (10.0) - -
Redemp n Canc of Shares - ₹ 14.0 ₹ 533.0 - - - ₹ 19.0
Acquisition of companies - - ₹ (8.0) ₹ (27.0) - ₹ (98.0) -
Inter corporate deposits - - - - - - -
Other investing items ₹ (26,663.0) ₹ 5,360.0 ₹ 7,335.0 ₹ (2,659.0) ₹ 1,051.0 ₹ 12,813.0 ₹ (4,357.0)
Cash from Investing Activities ₹ (39,572.0) ₹ (25,140.0) ₹ (20,879.0) ₹ (33,116.0) ₹ (25,671.0) ₹ (4,442.0) ₹ (15,419.0)

Financing Activities
Proceeds from shares ₹ 5.0 - - ₹ 3,889.0 ₹ 2,603.0 ₹ 19.0 ₹ 20.0
Redemption of debentures - - - - - - -
Proceeds from borrowings ₹ 33,390.0 ₹ 37,482.0 ₹ 51,128.0 ₹ 38,297.0 ₹ 46,641.0 ₹ 46,578.0 ₹ 43,934.0
Repayment of borrowings ₹ (21,732.0) ₹ (29,964.0) ₹ (35,198.0) ₹ (29,847.0) ₹ (29,709.0) ₹ (42,816.0) ₹ (62,557.0)
Interest paid fin ₹ (5,336.0) ₹ (5,411.0) ₹ (7,005.0) ₹ (7,518.0) ₹ (8,123.0) ₹ (9,251.0) ₹ (9,336.0)
Dividends paid ₹ (121.0) ₹ (96.0) ₹ (95.0) ₹ (57.0) ₹ (30.0) ₹ (100.0) ₹ (141.0)
Financial liabilities - - - ₹ (1,346.0) ₹ (1,477.0) ₹ (1,559.0) ₹ (1,517.0)
Other financing items - - - ₹ (29.0) - ₹ 3,750.0 ₹ 3,355.0
Cash from Financing Activities ₹ 6,206.0 ₹ 2,011.0 ₹ 8,830.0 ₹ 3,389.0 ₹ 9,905.0 ₹ (3,379.0) ₹ (26,242.0)

Net Cash Flow ₹ 88.0 ₹ (5,706.0) ₹ (378.0) ₹ 1,971.0 ₹ 13,141.0 ₹ (4,289.0) ₹ (9,400.0)

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Eicher Motors Ltd. - Ratio Analysis

Ratio Analysis - EICHER MOTORS LTD

Years Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Trend Mean Median

Sales Growth - 9.28% -6.57% -4.73% 18.09% 40.24% 14.50% 11.80% 11.89%
EBITDA Growth - 3.40% -24.84% -18.31% 22.11% 58.24% 25.64% 11.04% 12.76%
EBIT Growth - 0.72% -30.82% -26.03% 29.50% 69.18% 27.82% 11.73% 14.27%
Net Profit Growth - -7.57% -17.41% -31.11% 36.60% 69.85% 23.64% 12.33% 8.03%
Dividend Growth - 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Gross Margin 38.85% 37.81% 33.21% 28.20% 30.39% 32.91% 35.29% 33.81% 33.21%
EBITDA Margin 31.33% 29.64% 23.85% 20.45% 21.15% 23.86% 26.18% 25.21% 23.86%
EBIT Margin 28.84% 26.58% 19.68% 15.28% 16.76% 20.22% 22.57% 21.42% 20.22%
EBT Margin 28.78% 26.50% 19.47% 15.09% 16.57% 20.02% 22.26% 21.24% 20.02%
Net Profit Margin 18.34% 15.51% 13.71% 9.91% 11.47% 13.89% 15.00% 13.98% 13.89%

Selling Expenses % Sales 7.52% 8.17% 9.36% 7.75% 9.25% 9.05% 9.10% 8.60% 9.05%
Depreciation % Sales 2.49% 3.07% 4.17% 5.17% 4.39% 3.64% 3.61% 3.79% 3.64%
Opearting Income % Sales 28.84% 26.58% 19.68% 15.28% 16.76% 20.22% 22.57% 21.42% 20.22%

Return on Capital Employed 36.00% 28.60% 17.61% 11.43% 13.57% 19.11% 20.21% 20.93% 19.11%
Retained Earnings % 81.76% 77.56% 72.81% 46.26% 51.38% 49.55% 43.69% 60.43% 51.38%
Return on Equity % 23.39% 17.04% 12.57% 7.56% 9.37% 13.38% 13.74% 13.86% 13.38%
Self Sustained Growth Rate 19.12% 13.21% 9.16% 3.50% 4.81% 6.63% 6.00% 8.92% 6.63%
Interest Coverage Ratio 484.14x 355.25x 95.41x 81.00x 91.89x 104.19x 73.34x 18360.43% 9541.05%

Debtor Turnover Ratio 131.84x 116.23x 105.50x 55.14x 34.09x 39.15x 44.24x 75.17x 55.14x
Creditor Turnover Ratio 3.83x 4.29x 4.12x 3.01x 3.01x 3.69x 3.56x 3.64x 3.69x
Inventory Turnover Ratio 22.72x 15.47x 15.99x 9.97x 9.09x 11.30x 11.73x 13.75x 11.73x
Fixed Asset Turnover Ratio 5.97x 5.23x 3.85x 3.58x 4.25x 5.37x 5.67x 4.85x 5.23x
Capital Turnover Ratio 1.28x 1.10x 0.92x 0.76x 0.82x 0.96x 0.92x 0.96x 0.92x

Debtor Days 3 days 3 days 3 days 7 days 11 days 9 days 8 days 6 days 7 days
Payable Days 95 days 85 days 89 days 121 days 121 days 99 days 103 days 102 days 99 days
Inventory Days 16 days 24 days 23 days 37 days 40 days 32 days 31 days 29 days 31 days
Cash Conversion Cycle -76 days -58 days -62 days -78 days -71 days -57 days -63 days -67 days -63 days

CFO/Sales 373.16% 177.84% 127.50% 363.49% 280.71% 24.46% 195.10% 220.32% 195.10%
CFO/Total Assets 351.33% 153.01% 93.75% 217.73% 179.10% 18.40% 139.57% 164.70% 153.01%
CFO/Total Debt 351.33% 153.01% 93.75% 217.73% 179.10% 18.40% 139.57% 164.70% 153.01%

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

COMPARABLE COMPANY VALUATION

MARKET DATA
Company Share Price Share O/S Equity Value Net Debt Enterprise Value
Eicher Motors 4,829.60 27.41 1,32,379.34 273.13 1,32,652.47
TVS Motor Co. 2,782.05 47.51 1,32,175.20 23,579.97 1,55,755.17
Hero Motocorp 5,684.75 20.00 1,13,695.00 (90.06) 1,13,604.94
Ola Electric 110.65 441.08 48,805.50 4,020.63 52,826.13
Wardwizard Inno. 54.01 26.07 1,408.04 79.74 1,487.78
Urja Global 21.38 52.55 1,123.52 3.77 1,127.29
Tunwal E-Motors 49.10 5.53 271.52 17.87 289.39

FINANCIALS AND VALUATION

Company Revenue EBITDA Net Income EV/Revenue EV/EBITDA P/E
Eicher Motors ######## 5,402.78 4,184.13 7.8x 24.6x 31.6x
TVS Motor Co. ######## 5,649.23 1,821.89 3.8x 27.6x 72.5x
Hero Motocorp ######## 6,044.18 4,073.83 2.9x 18.8x 27.9x
Ola Electric 5,009.83 (1,040.19) (1,584.40) 10.5x (50.8)x (30.8)x
Wardwizard Inno. 328.37 34.26 14.82 4.5x 43.4x 95x
Urja Global 45.48 3.80 2.63 24.8x 296.7x 427.2x
Tunwal E-Motors 104.60 18.00 11.81 2.8x 16.1x 23x

High 24.8x 296.7x 427.2x

75th Percentile 10.5x 27x 95x
Average 8.2x 53.8x 92.4x
Median 4.5x 24.6x 31.6x
25th Percentile 2.9x 16.1x 23x
Low 2.8x (50.8)x (30.8)x

EICHER MOTORS COMPARABLE VALUATION EV/Revenue EV/EBITDA P/E

Implied Enterprise Value 76,763.00 1,32,652.47 1,32,652.47
Net Debt 273.13 273.13 273.13
Implied Market Value 76,489.87 1,32,379.34 1,32,379.34
Shares Outstanding 27.41 27.41 27.41

Implied Value per Share 2,790.58 4,829.60 4,829.60

Overvalued Fairly Valued Fairly Valued

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

DISCOUNTED CASH FLOW ANALYSIS

FCFF PROJECTIONS (In ₹ Cr)

2025 2026 2027 2028 2029

EBIT 3,215.89 3,514.51 3,841.48 4,199.55 4,591.70
Less: Taxes (858.08) (966.91) (1,088.72) (1,225.03) (1,377.51)
NOPAT 2,357.81 2,547.60 2,752.76 2,974.51 3,214.19
Add: Depreciation & Amortisation 669.21 723.03 778.85 837.53 899.86
Add/Less: Net Working Capital Changes 2,413.51 12.33 16.76 20.92 24.93
Less: Investment in Fixed Assets (739.91) (809.72) (885.63) (968.79) (1,059.90)
FCFF 4,700.62 2,473.24 2,662.73 2,864.17 3,079.08
Discount Factor 0.9684446 0.837103 0.723575 0.625443 0.54062

PV of Explicit Period 12005.315

Exit Multiple
EV/EBITDA 21.25
EBITDA 5,491.56
Enterprise Value (Terminal Value) 1,16,695.58
PV of Terminal Value 56,308.73

Total PV of Operations 68,314.04

Add: Non-Operating Assets Including Cash 146.00
Value of Firm 68,460.04
Less:Debt (419.44)
Value of Equity 68,040.60
Shares Outstanding 27.38
Value Per Share 2,485.05

Share Price Comparison : Relative Performance 1 Yr

180%

160%

140%

120%

100%

80%

60%

40%

20%

0%

-20%
Series1 Series2 Series3 Series4

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

ESG COMPLIANCE AND RISK MITIGATION

Purpose
This section evaluates Eicher Motors' adherence to Environmental, Social, and Governance (ESG) standards.
As ESG factors increasingly influence investment decisions, understanding Eicher Motors' compliance and
practices in these areas is essential for assessing its long-term sustainability and risk profile.

Scope
The analysis covers Eicher Motors' environmental impact, social responsibility, and governance practices,
detailing regulatory compliance, initiatives, challenges, and performance metrics.

Environmental Compliance
Management Approach:
The management in recent years, has been adopting a proactive strategy focused on minimising its
environmental impact across the value chain. They have focused on applying resource ecient practices as
well as increasing the share of renewable energy in their operations. Going forward, they plan on
formalising these eorts by setting clear goals, targets, and governance mechanisms, with resource eciency
remaining a key component of its sustainability strategy.
Energy and Emissions:
While manufacturing in automobile industries is bound to rise corresponding to the increasing demand, it
also puts pressure on energy resources such as coal and other fossil fuels. EML’s strategic steps to
environmental sustainability are rooted in the belief to reverse the existing trend of over consumption and
restore balance in the ecosystem. We recognise the possibility to reduce energy intensity by active
involvement in eorts to reduce consumption in our operations and switch to renewable energy.
Energy Consumption:
While the energy consumption has been steady, the company on its part has been upping its capacity, both
onsite as well as offsite. The firm has been taking a string of energy conservation and eciency measures
totalling over 2700+ MwH in savings and over 1900 tCO2e emmisions. The firm has made the goal of
enhancing renewable power component in the energy matrix, a key objective. Considering the severity of
impacts of carbon emissions, we compute the emissions occurring as a result of our energy consumption

Scope 1 Emissions: Organisational Boundary (Direct Emissions)

Scope 2 Emissions: Purchased Electricity, cooling, steam and, heat (Indirect Emissions)
Scope 3 Emissions: Supply chain & transportation, distribution and end of life (Indirect Emissions)

Regulatory Framework: The firm follows the BS VI emissions norms laid out in 2020, which state stringent
emission standards to be adopted by the vehicle manufacturing industries in their products.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

BS-VI Emissions: are the latest and by-far the most stringent set of GHG EMISSIONS (tCO2e)
measures implemented in India, aimed at reducing air pollutants from
90000
motor vehicles. Introduced in April 2020, BS VI norms represent a 79462
80000 72545 73904
significant leap from the previous BS IV standards. These norms seek to 70000
lower emissions by looking to drastically reduce the harmful pollutants 60000 54679
emitted by burning fuels. In this vein, they have sought to increase 50000
mandates on fuel quality as well as emphasise technological upgrades. 40000
Vehicles now require advanced technologies like Selective Catalytic 30000
Reduction (SCR) and Diesel Particulate Filters (DPF) to comply with 20000

these standards, especially for diesel engines. Additionally, the firm has 10000

been focused on reducing waste, by recycling and reusing materials. 0

These recycled components make up over 18% of the total materials

used.

Future Scope: In addition to a continuing focus on energy conservation and eciency, we aim to achieve
carbon positive status in our operations by reducing energy consumption, using renewable energy sources
and using carbon osets to restore the balance of the ecosystem. Our long-term strategy involves target
setting and developing roadmaps to achieve those targets over the next few years.

Water Management Practices: Eicher Motors has demonstrated a strong commitment to sustainable water
management across its manufacturing facilities, with particular focus on minimizing freshwater
consumption, enhancing recycling eorts, and mitigating water-related risks in areas of water stress. They
have maintained a Zero Liquid Discharge(ZLD) status at all of its manufacturing facilities, ensuring no
wastewater is discharged into the environment. The firm makes use of a multi-stage treatment system to
recycle over 92% of its total water withdrawal. To further reduce dependency on freshwater, Eicher Motors
has implemented rainwater harvesting systems at several facilities. Additionally, they have undertaken
several initiatives aimed at improving water eciency in its operations. These include the installation of water-
ecient sanitary fittings and optimization of water usage in cooling and production processes.

Waste Management:
The firm is increasingly adopting the industry-standard best practices, in line with the regulatory standards
of the sector. The company optimizes resource usage by reducing waste from materials such as brass, paint
sludge, and oil. It ensures responsible disposal of hazardous waste, diverting materials like paint sludge to
cement kilns for co-processing and recycling used oil and solvents through authorized vendors. Non-
hazardous waste is processed through authorized dealers to maximize recycling and recovery. Overall, its
focus on reducing hazardous and non-hazardous waste, combined with eorts to optimize material usage
showcases a strong commitment to environmental responsibility and regulatory compliance.

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Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

SOCIAL COMPLIANCE
Employee Welfare: AVERAGE HOURS OF TRAINING BY
The firm emphasises on maintaining an open-door work culture and has EMPLOYEE CATEGORY
25
a series of training initiatives and programs in place for the continuous 19.2
development of its employees. The firm however does poorly when it 20
15.45
comes to gender diversity, women workers account for only 6% of the 15

entire workforce. The firm has established a dedicated training 10

5.32 5.32
department to cater to the skill development needs of both permanent 5 3
and contractual employees. The company rolls out an annual training 0
calendar at the start of each financial year, which includes a variety of
internal and external training programs facilitated by Eicher Motors or
third-party agencies. Last year, they conducted 273 training program

across multiple categories. Additionally, they also leverage digital platforms such as ‘Percipio,’ an online
learning tool, to provide skill enhancement opportunities. In the last fiscal year, 1,048 of their employees
engaged with over 1,700 hours of online content through the platform. By offering a blend of in-person and
digital learning opportunities, the company ensures that employees at all levels have access to relevant skill-
enhancement programs. This commitment to workforce development may contribute to improved
operational eciency and employee retention, supporting Eicher’s long-term business objective.

Community Engagement:
The company in line with Section 135 of the Companies Act 2013, established a CSR committee, composed
of three directors including the managing director, to oversee the implementation and periodic review of
the CSR policy. The committee monitors the eectiveness of CSR initiatives and suggests policy updates as
needed. The firm has undertaken a sleuth of community development projects. Over the course of the last
few years, they have joined hands with NGOs to improve the status of maternal and child health in rural
regions. Further, they have introduced Upliftment programmes in Villages looking to donate wheelchairs,
bicycles, setting language training facilities among others. The firm has made strides by undertaking village
electrification projects across 25+ villages, impacting over 3000+ lives. In partnership with Unnati
foundation, the firm has also established skill development academies with multiple centres in the regions
of Chennai, Gurgaon and Lucknow, focusing on holistic training and skill development amongst youth. Along
with all of this, they also undertake a multitude of campaigns in the Himalayan terrains from road safety
awareness, emergency care centres, homestays and many more. In partnership with Pragya, they also
conducted various skill development programs, including vocational training in mobile repair, ecotourism,
and basic computing, benefiting 218 participants. The company also provided vocational advisory services
to 868 youth and distributed support kits to select trainees. Additionally, a career fair and Buyer Seller Meet
were organized to connect trainees with job opportunities and promote trade discussions, reflecting
Eicher’s focus on enhancing employability and supporting local communities. These efforts showcase a
strong commitment towards development of sustainable communities and delivering social impact.

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
The company operates through a centralized safety committee, supported by high-level and shop floor-
specific committees at each manufacturing plant, which meet quarterly to review and update safety
protocols. Eicher Motors enforces stringent safety guidelines, including valid work permits for high-risk
activities and regular mock drills for emergency preparedness. Eicher Motors' robust approach to
occupational health and safety demonstrates its commitment to maintaining a safe working environment.
The establishment of a centralized safety committee, stringent safety protocols, and continuous
improvement practices reflect a well-structured OHS framework. The company’s proactive measures in
safety training and health services contribute to its overall ESG performance, supporting a safe and
compliant workplace.

Governance Practices:
The firm has a well-established governance framework in player backed by grounded policies. The senior
management monitors the sustainability performance of our business across its operations. The compliance
team ensures that all the relevant regulatory requirements are met in the operations, which include social &
environmental compliances. The board comprises esteemed & accomplished Directors in their respective
fields.
The governance processes of the Company include creation of empowered sub-committees of the Board to
oversee the functions of executive management. These sub-committees of the Board mainly comprise Non-
Executive Directors and Independent Directors, which meet and deliberate regularly to discharge their
obligations. In India, Corporate Governance standards for listed companies are regulated by the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI
(LODR) Regulations, 2015]. The Company has adopted best practices mandated in SEBI (LODR) Regulations,
2015.

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200
Risk Management Practices
A risk management committee of the board is in place which has a broad oversight of all the related risks and
related impacts that exist with the firm, are periodically reviewed by the board. For an ease of understanding,
the various risks and associated practices have been presented in a tabulated format.

RISK IMPACT MITIGATION RESPONSE

Plans laid out to comply with BS– VI
norms.
Taxes and quotas levied on natural Conformance with product safety
resources employed. standards.
Regulatory Transition risks due to emerging Use of recycled/recyclable materials in
regulations. product & packaging.
Product safety regulations. Monitoring of all compliance
requirements at the facility level &
organisational level.

Developing relationships with dealers.

Being perceived as a brand that is
Developing digital capabilities & tools for
not socially/environmentally
forecasting & social media engagement.
Brand & Reputation responsible.
High-product quality frameworks for
Loss in brand value.
operations and supply chain.
Social licence to operate.
CSR activities in local communities.
Enhancement in resource (energy &
Physical safety of operations due water).
to natural disasters. Efficiency in operations.
Climate Related
Chronic risk of resource scarcity for Scaling up of renewable energy.
operations & supply chain. Disaster management plan covering
floods.
Supplier audits covering quality, safety,
environmental, cost and design aspects.
Price & quantity volatility of critical Development of long-term relationships
inputs. collaborative working and assistance.
Production Factors
Quality of supplied components. Supply chain spread strategically.
Retention of Trained Labour. Multisourcing of critical parts.
A higher share of proximity suppliers.
Low-cost automation initiatives.

Active customer engagement.

Changing expectations of customers Enhancement of in-store experience.
Market Preferences
on product offerings & quality. Events & rides to engage closely with
customers.

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj
Eicher Motors Ltd.
NSE: EICHERMOT | BSE: 505200

Sources:
Company Reports
Screener
Yahoo Finance
Trendlyne
MOFSL

Disclaimer: This is an academic project not meant for Commercial use.

The information/document does not constitute an offer to buy or sell or a solicitation for the
purpose or sale of any financial instrument or as an official confirmation of any transaction.
The information herein in this document is obtained from publicly available data or other
sources believed to be reliable and the author has not independently verified the accuracy
and completeness of the said data, so it should not be used as such.
The author is not a SEBI-registered investment analyst or investment research analyst. This
document is prepared as a part of an academic project. Investments in securities are subject
to market risks, read all the related documents carefully before investing. The securities
quoted are for illustration only and are not recommendatory.

Contributors

FMA SRCC FMA Hansraj

Harsh Gadia Sneha Sah
Shubham Kothari Puspit Jain
Lavanya Anand Neal Agarwal
Sharanya Maheshwary Yashash Jain
Prateek Shrivastav Md. Imran
Riddhi Jain

Academic Project - Not For Recommendation Prepared by FMA SRCC and FMA Hansraj