Royal Enfield says it had a "phenomenal" FY 17-18
Praveen M, Engineer-turned-motorcycle journalist. I'm a sucker for cruising down the highways, and twisties in the hills.
Eicher Motors Limited (EML), the parent company of Royal Enfield announced the audited consolidated financial results for the fourth quarter and financial year ended March 31, 2018. The Board of Directors at EML approved the results.
In FY 2017-2018, EML recorded its highest ever total revenue from operations at INR 8,965 crores; highest ever EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) at INR 2,808 crores and highest ever Net Profit After Tax at INR 1,960 crores. The total comprehensive income has grown by 18.3% over the previous fiscal. EML’s daughter brand Royal Enfield posted a growth of 23.1%, registering a total sale of 8,20,121 units in FY 2017-18.
In the fourth quarter of FY 2017-18, it tallied 2,26,907 units as opposed to 1,78,345 units in Q4 2016-17. This translates into a growth of 27.2%, the best ever quarterly sales. Royal Enfield also posted its highest ever quarterly revenue from operations at Rs 2,528 crores for Q4 2017-18, a growth of 34% over the corresponding period last year. Commenting on Royal Enfield’s performance, Siddhartha Lal - MD and CEO Eicher Motors Ltd said:
Royal Enfield had a phenomenal year on all fronts of its business. While we launched several relevant and differentiated variants, the highlight of the year was the unveiling of our first modern twin cylinder motorcycles - Interceptor 650 and the Continental GT 650. These motorcycles have created quite an excitement both in emerging as well as developed markets and we are confident that once launched, they will grow the middleweight segment globally. Continuing to strengthen our motorcycle offerings, Royal Enfield launched the Himalayan Sleet + Explorer Kit and the Thunderbird X in this quarter. The Thunderbird X is a factory built custom inspired motorcycle for urban explorers, with features like alloy wheels, tubeless tyres and lower handlebar appealing to new age customers. It has received encouraging response especially from the younger audiences and continues to see growing interest.
Also Read: Electric Royal Enfield in the works – Report
Royal Enfield will invest INR 800 crores in FY 2018-19 to enhance all areas of its business. The investment would be towards setting up Phase-2 of the company’s third plant at Vallam Vadagal near Chennai; completing construction of the Technology Centre in Chennai this year. The investment is also towards the development of new products to meet upcoming regulations; and to expand Royal Enfield’s portfolio for its global markets. The planned capacity for FY 2018-19 is 950,000 units.
To further strengthen the brand and to accelerate market development activities, Royal Enfield has decided to set up wholly owned subsidiaries in Indonesia and Thailand in 2018-19. Lal further added:
In the international markets, Royal Enfield entered Argentina and opened the first exclusive store at Buenos Aires. Beyond India, Royal Enfield now has over 540 dealerships across 50 countries and 36 exclusive stores, 11 of which were opened in 2017-18. In India, we are looking at building new retail formats, as we continue to expand our dealer network. In an effort to allow easy discovery and access to pre-owned motorcycles, we launched a pre-owned motorcycle store - Vintage - in Chennai, in this quarter. In a first of its kind initiative in the two-wheeler industry, Royal Enfield Vintage will deal exclusively in pre-owned, refurbished and restored motorcycles offering hassle free sale and purchase experience to consumers. We are targeting opening 10 Vintage stores across the country in the current financial year.
The brand will be launching its flagship models, the 650 Twins in the next few months. The cult bike maker is mulling about assembling bikes in South East Asia, where it has a healthy presence. The company is also reportedly working on adding ABS to its existing line-up in India.