Royal Enfield’s whole-time Director and CEO, Vinod Darasi tell ET Now “We are targeting 20% revenue from the non-motorcycle business. We have more than a billion dollars in cash now.“
In Q4FY21, Eicher Motors’ profit after tax was up by 73% at Rs.526 cr. While the revenue beat markets expectations with Rs.2940 cr in number. In Q4FY21, EBITDA was up 47% YoY and margins improved from 19.6% last year to 21.6%.
In FY22 company could see the highest ever new model launches. Dasari is finding the year 2021 a truly challenging yet super exciting year as the company plans to launch many products.
In comparison to the second COVID wave with the first one, Dasari sees 2nd wave much worse versus the 1st wave given the fatality & cases.
But in the second wave, he feels businesses have learnt to take action ahead of time. He feels suppliers are also struggling given the 2nd wave of COVID-19, but he is hopeful of seeing a significant decline in COVID cases in India in the next 1-2 weeks. To tackle the ongoing pandemic, vaccination is the only way out he adds.
Going forward, the company is hopeful of getting a 20% revenue contribution from overseas markets by 2025-2026, which is currently around 8-9%.
Also, they aim for margins to be somewhere in between 20%-30%. Commenting on its strong financial position, Dasari adds that the company has more than a billion Dollar cash in its books now.
With the cash on books, they are open to all the 3 options available, either – investing in new acquisitions, planning some Capex, or giving back to shareholders in form of dividends but any decision is yet to be taken.
On the demand front, the company is seeing pent-up demand from international markets while Indian markets have taken a hit. Order books are fairly full, and the company just needs to ramp up production. Dasari is hopeful to bounce back faster than last year.
Commenting on business segment contribution, Dasari says the company is targeting 20% revenue from the non-motorcycle business.
The company wishes to participate in the riding experience of the customer as well as they offer various accessories, outfits, and more to give personalized feel.
The current strategy to combat erosion in margins is to Work on to grow in International markets, work on growth in non-motorcycle revenue and plan more model launches in Indian markets