Eicher Motors Reports Record Q2 FY25 Results, Expands Global Reach with New Ventures

Key Takeaways from the Financial Performance

• Eicher Motors achieved its best Q2 revenue at ₹4,263 crore with an 8.3% growth in PAT, reflecting solid financial performance.
• New facilities in Bangladesh and upcoming CKD operations in Brazil underscore Eicher's commitment to international growth.
• Royal Enfield’s entry into the EV market with Flying Flea aligns with Eicher’s long-term strategic goals in sustainable mobility.

The company’s EBITDA for the quarter was ₹1,088 crore, maintaining the previous year’s performance, while Profit After Tax rose by 8.3% to ₹1,100 crore. Eicher's iconic motorcycle brand, Royal Enfield, sold 2,25,317 motorcycles this quarter, compared to 2,29,496 units sold in Q2 FY24.

VE Commercial Vehicles (VECV), Eicher’s joint venture with Volvo, posted a revenue increase of 8% year-on-year to ₹5,538 crore, with a slight dip in EBITDA to ₹395 crore. VECV’s profit after tax also rose to ₹209 crore, marking significant growth driven by robust sales of 20,774 vehicles, up from 19,551 units last year.

The company took strategic strides forward globally. It started establishing a new manufacturing and assembly unit of Royal Enfield in Bangladesh. Plans are also underway to have the second CKD facility in Brazil. Two new motorcycles, the Guerrilla 450 and the Classic 350, marked their way into the markets with fairly decent reception by the public. As another landmark, it introduced its electric vehicle foray under the brand Flying Flea, unveiling two models, C6 and S6, which it showcased at EICMA 2024.

Siddhartha Lal, Managing Director of EML, emphasised Eicher's growth across sectors and innovation in the EV space, positioning the company as a key player in both the traditional and electric motorcycle markets. 

About Eicher Motors Limited  

Eicher Motors Limited, or EML, is the parent company of Royal Enfield-the global leader for the middleweight motorcycle segment. Founded in 1901, it has operations in over 65 countries and manufactures motorcycles that combine simplicity and pleasing riding experiences. VE Commercial Vehicles Limited is a joint venture company of Volvo in India, which works to modernise commercial transportation in the country. In FY24, EML reported total revenue of ₹16,536 crore.

About VE Commercial Vehicles Limited (VECV)  

VECV is a joint venture between Eicher Motors Limited and Volvo Group, incorporating the two brands - Eicher trucks and buses and leading commercial vehicle technologies of Volvo. Established in 2008, VECV has built itself as a brand of reputation in India's commercial vehicle manufacturer, striving towards innovative solutions that upgrade transportability and satisfy customers.

Key Takeaways from Inox Green’s Demerger:

• Inox Green Energy Services (IGESL) has approved the demerger of its Power Evacuation Business into Resco Global Wind Services (Resco).
• The demerger will allow IGESL to concentrate on its operations and maintenance services, while Resco will focus on the Power Evacuation Business.
• Resco will issue 122 equity shares and 122 warrants for every 1,000 shares and warrants of IGESL held by shareholders.
• Post-demerger, IGESL's promoters will hold 56.92% and Resco's promoters will hold 83.66%, with the public shareholding for each entity at 43.08% and 16.34%, respectively.

The proposed demerger will separate IGESL's Power Evacuation Business from its operations and maintenance (O&M) services for wind turbine generators (WTGs). The company believes this move will enable each business to focus on its core strengths and attract distinct investors, strategic partners, and stakeholders. The Power Evacuation Business, once transferred to Resco, will benefit from enhanced focus and value creation.

As part of the scheme, Resco will issue equity shares and warrants to IGESL's shareholders. The exchange ratio will be 122 equity shares of Resco (face value Rs 10 each) for every 1,000 equity shares of IGESL (face value Rs 10 each). Additionally, Resco will issue 122 convertible warrants (issue price Rs 205 each) for every 1,000 warrants held by IGESL shareholders.

The shareholding structure of both companies will also change. Following the demerger, IGESL's promoters will continue to hold 56.92% of the company, while the public's shareholding will remain at 43.08%. For Resco, the promoters will hold 83.66%, and the public will hold 16.34%.

This restructuring is expected to strengthen both companies by allowing them to pursue independent growth strategies, with a clear focus on their respective business areas.

About Inox Green Energy Services Limited:

Inox Green Energy Services Limited, formerly known as Inox Wind Infrastructure Services Limited, was incorporated on 11th May 2012. The company, a subsidiary of Inox Wind Limited and part of the INOXGFL Group, is primarily engaged in providing Operation & Maintenance (O&M) services and common infrastructure for Wind Turbine Generators (WTGs). With a focus on renewable energy, Inox Green serves a vital role in ensuring efficient WTG operations through services like predictive and reactive maintenance, as well as coordination with DISCOMs. The company operates under the broader INOX Group, which has been active since 1923. 

Key Takeaways from Vedanta’s Tax Demand:

• The company has received a Rs 319.79 crore penalty order from the GST Authority regarding non-payment of OID Cess for Videocon's share in the Ravva oil block for December 2019 to March 2023.
• The penalty is solely for Videocon's share, with Vedanta's own liability being Nil. 
• Vedanta is evaluating the order and plans to appeal before the appropriate appellate authority.
• The company does not anticipate any significant operational or financial impact from the order and clarified that the delay in disclosure was due to an internal review.

This demand is related to the non-payment of OID Cess for the share of Videocon Industries Limited, a joint venture partner in the Ravva oil and gas block, for the period between December 2019 and March 2023.

The penalty demand pertains solely to Videocon's share of the OID Cess, and Vedanta's share of the demand is Nil. The company is currently evaluating the order and plans to appeal the decision before the appropriate appellate authority. 

Despite the demand, Vedanta does not anticipate any significant operational or financial impact from this order. The company also clarified that the delay in disclosure was due to an internal assessment of the situation and verifying the details of the order.

Vedanta has stated that it is in the process of reviewing the matter and will take appropriate steps moving forward. The order was received on 11th November 2024, and further updates will be provided as the situation progresses.

About Vedanta Limited:

Vedanta Limited is a leading natural resource and technology conglomerate dedicated to driving India's growth and self-reliance. Focused on sustainable development, Vedanta is committed to operational excellence, innovation, and creating value for all stakeholders. With a diverse portfolio spanning aluminium, zinc, oil and gas, iron ore, copper, power, and more, the company plays a pivotal role in shaping India's future. Through initiatives like Nand Ghar, Vedanta supports social impact projects including child welfare, healthcare, education, and women’s empowerment. With a strong focus on sustainability, Vedanta strives to contribute to a greener economy while enhancing the lives of millions.

Key Takeaways from Wipro and Sipchem Digital Transformation:

• Sipchem completes SAP S/4HANA implementation with Wipro’s support.  
• The project covers Sipchem’s operations in Saudi Arabia and Switzerland.  
• The new system streamlines operations and improves decision-making.  
• Wipro’s strong local presence and experience in the Energy & Oil sectors contributed to the success.  

The project, which spans Sipchem's operations in both Saudi Arabia and Switzerland, is built on SAP's RISE platform and incorporates industry best practices.

This digital upgrade will streamline Sipchem’s operations and enhance decision-making, positioning the company as a future-ready enterprise. 

"This pivotal milestone is a highlight in the transformative era of digitalization at Sipchem, enabling us to streamline our operations and enhance our competitive edge in the global market," said Abdullah Saif Al-Saadoon, Chief Executive Officer, Sipchem. 

Vinay Firake, CEO, Asia Pacific, Middle East and Africa (APMEA), Wipro Limited, said, “With this successful implementation, Sipchem is better positioned to respond adeptly to market demands, foster innovation and pursue strategic growth opportunities.”  

Wipro’s significant local presence in Saudi Arabia and its strong track record in the Energy and Oil & Gas sectors were key factors in the success of this partnership.

About Wipro Limited:

Wipro Limited is a leading technology services and consulting company that focuses on creating innovative solutions to help clients with their complex digital transformation needs. By combining expertise in consulting, design, engineering, and operations, Wipro helps clients achieve their most ambitious goals and build businesses that are ready for the future. With over 230,000 employees and business partners in 65 countries, Wipro is committed to supporting its customers, employees, and communities to thrive in a constantly changing world.