Gaurav sharma 16 Naveen 18 Anmol Vishwamber

Production of automobiles increased at a CAGR of 9.4% over FY06-16.

The automobile industry in India is expected to be the world's third largest by 2017.

The country currently being the world's second largest two-wheeler manufacturer.

Two-wheeler production is projected to rise to 34 million by FY20.

The industry accounts for 7.1 per cent of the country's Gross Domestic Product (GDP)

100% FDI allowed for auto component sector.

Automobile exports grew by 15 per cent over the last year.

Sector Overview

Company overview

Company overview

In 1959 the Eicher Tractor Corporation of India Private Ltd was established.

1959 India’s first tractor rolls out of Eicher factory in Faridabad.

Eicher Motors Ltd (EML), incorporated in 1982.

1994 Eicher Motors acquires Enfield India Ltd.

In 2008 EML and Volvo Group's 50:50 joint venture VE Commercial Vehicles (VECV) designs, manufactures commercial vehicles.

Royal Enfield “Bullet” is the longest running model in continuous production.

Eicher Trucks Eicher Polaris Multix Royal EnfieldTypes of Vehicles

Key pointsMotorcycle industry in India did not grow in 2015-16 over 2014-15

Royal Enfield’s market share has grown to 4.7% in year 2015-16.

it added nearly 100 new dealerships taking the total dealership network to over 500.

Company launched the Himalayan, a motorcycle purpose-built for adventure and touring in the Himalayas in March 2016.

Sales of motorcycles of engine displacement of 150cc engine in 2015-16 has grown from 12.0% in 2013-14 to 22.2% in 2015-16.

Company continues to grow handsomely and enjoys a dominant position in 250cc and above segment where it enjoys a 96.1% market share in India.

Management Discussion Analysis

Company acquired U.K.-based Harris Performance Products Limited

Company is expected to built 900,000 motorcycles annually

Company set up twelve exclusive Royal Enfield stores including five in Colombia, two in London etc.

In international markets registering an annualised growth of 16.4%.

Company added more than 600 permanent employees.

Company acquired a 50-acre plot at Vallam Vadagal, near Chennai at third manufacturing facility.

Company has deployed a robust ERP system based on SAP platform. This ensures high degree of system-based checks and control and continuous monitoring.

Revenue from international markets grew to Rs. 159.82 crores in 2015- 16, registering an annualised growth of 32.8%1

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3

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BALANCE SHEETRATIO ANALYSIS

FY 2015-16 15688

CY2014 8738

CY 2013 6809

CY 2012 6389

FY 2015-16 2447

CY2014 1114

CY 2013 713

CY 2012 549

FY 2015-16 1451

CY2014 701

CY 2013 525

CY 2012 474

FY 2015-16 52096

CY2014 40860

CY 2013 13545

CY 2012 7848

TOTAL REVENUE (Rs in crores) EBITDA (Rs in crores)

MARKET CAPITALISATIONPAT (Rs in crores)

source: EML annual report

KEY RATIOSRATIOS STANDALONE CONSOLIDATED

EPS (RS) 453.20 470.90

BOOKVALUE 791.89 1,275.51

DIVIDEND PER SHARE (RS) 100 100

EBITDA MARGIN (%) 30.84 16.32

PBT MARGIN (%) 28.61 13.38

NET PROFIT MARGIN 19.87 9.26

CURRENT RATIO 0.98 1.02

INVENTORY TURNOVER RATIO 20.60 15.46

DIVIDEND PAYOUT RATIO (%) 22.08 21.25

TOTAL DEBT/EQUITY 0 0

P/E RATIO 42.32 40.80

LAST SIX MONTHS STOCK PERFORMANCE

PEER COMPARISONS

Management Discussions and Analysis

2014-15( CRORES )

2015-16( CRORES )

INCREASE/DECREASE

REVENUE FROM OPERATIONS 3,031.22 6,188.03 104.1%

DOMESTIC BUSINESS 2,568 3,764.9 46.6%

TOTAL EXPORTS 5,943 10,545 78%

• Operating margin is increased to 14.1%

COMPETITOR COMPARISON

BALANCE SHEET

PROFIT AND LOSS ACCOUNT

IMPORTANT P/L ITEMS

PAT

EBITDA

Sales

0 500 1000 1500 2000 2500 3000 3500 4000

216.3

289.2

2568

382.5

531.3

3764.9

Chart Title

FY 2015-16 FY 2014-15

CASH FLOW STATEMENT• It shows how much cash is generated from a company's core

products or services and how it is used during time interval specified.• It breaks the analysis down to operating, investing and financing

activities• According to Companies Act,2013 , all Companies, Public or Private,

are mandatorily required to prepare Cash flow statement except One Person Company, Small Company and Dormant company.

Operating Activities

It includes revenue generating activities of business Cash Flow from Operating Activities = Net income+ Noncash Expenses +

Changes in Working Capital Net cash flow from operating profit is jumped to 14064.71 Cr from 685.96

Cr because it has sold 5,08,099 Royal Enfield vehicles and 52,025 VE Commercial Vehicles last year .

Investing Activities

It consist of buying and selling long-term assets and other investments. Constitute payments made to acquire long-term assets, as well as cash

received from their sale. Examples- purchase of fixed assets, sale of securities issued. It has invested 400 crore more as company opened stores in Indonesia

and Thailand . It announced markets in North-America It bought the UK-based motorcycle engineering and design firm, Harris

Performance. Launched Himalayan, an motorcycle for adventures and tourists.

Financing Activities

 It accounts for external activities that allow a firm to raise capital and repay investors, such as issuing cash dividends, adding or changing loans or issuing more stock.

Cash flow from financing activities shows investors the company's financial strength.

Company has distributed their wealth among investors.