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    505200   INE066A01021


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Eicher Motors : Transcript of the proceedings of the 39th Annual General Meeting

10/20/2021 | 06:11am EST

Transcript of the proceedings of 39th Annual General Meeting of Eicher Motors Limited held through Video Conferencing on August 17, 2021 at 1.00 p.m. IST

Swati (Moderator): I welcome all the shareholders and all directors and officers of the Company to the 39th Annual General Meeting of Eicher Motors Limited. Mr. S. Sandilya, Chairman of the Board, will chair the meeting and Mr. Manhar Kapoor, General Counsel and Company Secretary, shall assist the Chairman in conducting proceedings for this meeting from a secretarial perspective. I now hand over the call to Manhar.

Manhar Kapoor (Company Secretary): Good afternoon everyone, I welcome you all to the 39th Annual General Meeting of the Company. At the beginning of the meeting, 36 members are attending this meeting through video conferencing [93 Members, in total, attended the meeting]. I also confirm that Mr. Sandilya, Ms. Manvi Sinha, Mr. Vinod Aggarwal are present in the meeting and Statutory Auditors, Secretarial Auditors, the CFO and Vijay Gupta, Managing Partner, VKGN & Associates, who are the scrutinizers for this meeting are also present. I request Mr. Sandilya to proceed with the formal agenda of the meeting.

I must also say Mr. Siddhartha Lal, Managing Director and Mr. Inder Mohan Singh, Independent Director are facing some technical issues and they will be joining in shortly.

S. Sandilya (Chairman): I welcome the members to the 39th Annual General Meeting of Eicher Motors Limited. This AGM is being held through video conferencing, in compliance with the circulars issued by Ministry of Corporate Affairs and SEBI in this regard. I confirm that the quorum for the meeting is present and I call the meeting to order.

All Directors of the Company are present but Mr. Manhar explained that two of them are having some technical issues and therefore they are not participating, but they may join anytime as soon as the technical problem gets over. I would like to introduce the people, who are already participating and they will acknowledge their presence.

First Mr. Vinod Aggarwal, Non-Executive Director of the Company.

Vinod Aggarwal (Non Executive Director): Hello everyone.

S. Sandilya: Okay Vinod we acknowledge your presence.

Then Ms. Manvi Sinha, Independent Director, please acknowledge your presence.

Manvi Sinha (Independent Director): Mr. Sandilya and all shareholders, I am present and glad to be at the AGM.

S. Sandilya: Thank you. Mr. Kaleeswaran Arunachalam, Chief Financial Officer.

Kaleeswaran Arunachalam (Chief Financial Officer): Good afternoon everyone.

Manhar Kapoor: Mr. Siddhartha Lal has now also joined.

S. Sandilya: Mr. Siddhartha Lal has joined, Can you acknowledge your presence Siddhartha?

Siddhartha Lal (Managing Director): Good morning everyone, good morning Mr. Sandilya, this is Siddhartha Lal here joining in from the UK.

S. Sandilya: Thank you. I would like to inform that Mr. Vinod Kumar Dasari has resigned from the Board of Eicher Motors Limited, in which he was the whole time director and also from the position of CEO of Royal Enfield, with effect from the close of business hours of August 13, 2021.

I will now talk about the performance of the Company for the year 2020-21 and briefly cover financial and business performance, new products and geographical expansion among other highlights.

On behalf of the Board of Directors, I would like to welcome you all to the 39th Annual General Meeting of your Company. I trust you and your families are safe and doing well. For more than a year, the coronavirus pandemic and the ensuing emergency have resulted in disruptive changes across the world. Eicher Motors has seen a paradigm shift in the way of living, the way of working, and in the way of engaging and collaborating with people.

Your Company has adapted the ways of working to this new normal now. Your Company's progress on the strategic objectives, long term goals, launches, and business as usual has been steady and resilient to external challenges.

Let's start with looking at the overall business performance. The year 2020-21 was unprecedented as the COVID-19 pandemic affected economies and livelihoods across the globe. The instances of lockdown across the country and states, and the spread of the deadly disease resulted in suspension of operations at offices, plants and dealerships, primarily in the beginning of the financial year which impacted activities. The price increases on account of regulatory changes, supply chain disruption and acute commodity pricing pressure, further aggravated the situation. However, buoyant demand from the rural segment and a gradual recovery in the urban segment, also supported by the preference for personal mobility, helped the motorcycle industry register a strong growth of 20% in the latter half of the year as compared to the same period in 2019-20.

I will now commence with the performance of Eicher Motors Limited at a consolidated level. On a consolidated basis, Eicher Motors recorded a total revenue from operations of INR 8,720.4 crores, a decline of 5% over the previous year.

Consolidated Earnings before interest, depreciation and taxes (EBITDA) was Rs. 1,781.3 crores, a decline of 18% over the previous year. EBITDA percentage reduced to 20.4% in the current year, from 23.8% in the previous year. Eicher Motors' consolidated net revenue and EBITDA do not include the financials of its joint ventures - VE Commercial Vehicles and Eicher Polaris Private Limited. The profit or loss of the joint ventures are accounted for under the equity method as per the relevant accounting standard and are included in EML's consolidated total comprehensive income.

Eicher Motors' share of profit from the joint venture - VE Commercial Vehicles was Rs. 31.1 crores, a slight decline of 2%, as compared to the previous year. Total Comprehensive income, excluding share of loss from the discontinued operations of Eicher Polaris Pvt. Ltd., was Rs.1,381.2 crores, which is 25% lower compared with the previous year.

The Royal Enfield sales volume: Company's total sales volume was at 6,09,403 motorcycles in 2020-21, a decline of 13% from 6,97,582 motorcycles in 2019-20. Sales performance was impacted by COVID-19 led demand and supply disruption. The production operations gradually returned to pre-COVID levels as supply chain constraints eased over a period. A faster recovery in demand and an excellent response to the launch of Meteor 350 resulted in a strong order book. In India, your Company's sales volume was at 5,73,728 motorcycles in 2020-21, a decrease of 13% from 6,58,920 motorcycles in 2019-20. India continued to be the largest market for your Company. The share of India in your Company's total sales remained almost stable at 94%.

In International markets, your Company recorded a good performance despite the limitations placed at the beginning of the year. The total export volume was at 35,675 motorcycles in 2020-21, a decline of 8% from 38,662 motorcycles in 2019-20. North America and Latin America witnessed a growth in the sales volume for the year. A quick recovery in demand, launch of Meteor 350 and expansion of the distribution network helped your Company register a 50% growth in its export volume in the second half of the year over the same period in 2019-20. Your Company's focus on growing international business has resulted in an increase in the share of export volume to 5.9% in 2020-21 from 5.5% in 2019-20.

Moving ahead, specifically on Royal Enfield, this is a milestone year for your Company as the brand completes 120 years. Royal Enfield, a key brand of Eicher Motors Limited (EML) believes in and defines the pure motorcycling way of life. Since 1901, for over 120 years, Royal Enfield has carried forward this legacy of pure motorcycling and helped its customers create memories and experiences. It has engaged extensively with various internal and external stakeholders who have directly or indirectly contributed to its success story so far.

A quick look at important updates of Royal Enfield for the year 2020-21. As I mentioned earlier, the Meteor launch of Royal Enfield was significant. Royal Enfield introduced the all new easy cruiser, the Meteor 350 in November 2020. Built completely from the ground-up, the Meteor 350 is based on a new engine platform. This also marked the first ever digital launch of a motorcycle for your Company. The very creative and unique way of using technology for the launch not only delighted the Royal Enfield community and enthusiasts but also helped your Company reach a much wider audience. It was indeed outstanding and I had personally watched this launch.

Adding modern technology to retro styling, Meteor has the all new 'Tripper' navigation pod, enabling easy access to turn-by-turn navigation without interfering with the ride experience. The Meteor 350 garnered a lot of positive reviews from experts, media, and customers alike and was praised for its excellent build quality, performance and riding experience. The motorcycle received a very encouraging response not only in the traditional cruiser markets but also all across the nation, resulting in a large order book.

Another big step forward for your Company was the launch of a unique motorcycle personalization interface, Make It Yours - MiY, along with the Meteor 350. Taking a huge step towards advancing motorcycle personalisation in the 2-wheeler industry, your Company launched the Make it Yours (MiY) initiative. It's a first-of-its-kind initiative allowing a buyer to personalise, accessories and configure a motorcycle at booking stage through a 3D configurator. MiY offers thousands of possible combinations with choices across style, safety and comfort. MiY initiative is transformative across the entire Company. A large part of the portfolio has moved to MiY as Classic, Meteor 350, Himalayan and Twins are available with personalisation options. The new initiative has received a very good response as a large number of customers are booking through MiY. Widening of choices under MiY across the product portfolio will also help enhance the customer spend on a motorcycle.

MiY is also available on Apparel now. Consumers now have an exciting range of personalisation options across helmets and T-shirts to choose from. There are now more than 7,000 options to personalise helmets, and more than 15,000 options to personalise T- shirts using text, decals, graphics, colours, and several other choices. Motorcycling enthusiasts can now wear their personality, on or off the saddle.

Inspired by the 'Motorcycling Way of Life', your Company launched its first-ever exclusive women's apparel and riding gear range. The clothing range was designed to be aspirational yet accessible and support women in their pursuits of exploration.

Moving to other product launches in the year 2020-21. Himalayan. Eicher Motors launched the Himalayan in new colourways along with a host of functional upgrades and the Tripper navigation. Himalayan, in a short span of 5 years, has opened up a new category within global adventure touring. Its simplicity, versatility and competence have earned incredible response from riders across the world. Twins CTG Refresh, additionally your Company also launched the popular 650 Twin motorcycles in all-new colourways. Inspired by their rich legacy, these motorcycles now sport colourways that are refreshingly young and exciting.

Now moving on to other business updates. Studio stores. In 2019-20, Royal Enfield introduced the concept of a studio store which is very unique and is primarily meant for smaller and remote locations with minimal investment. The opportunity to set up a studio store was provided only to the existing Royal Enfield dealers to ensure delivery of a uniform customer experience conforming to the brand standards. After opening a record number of studio stores (600 stores) in 2019-20, your Company added another 431 studio stores in 2020-21. Despite lockdowns and restrictions during the year, the total tally was increased to 1,031 studio stores by the end of March 2021. All these stores were opened by existing Royal Enfield dealers which is a testament to the trust the dealer partners have in your Company and the potential of studio stores in expanding the dealer business. Thus, Royal Enfield network expansion continued even during the most challenging times of the pandemic.

In addition, Royal Enfield added 104 regular stores taking the total count of stores to 1,025. Today, Royal Enfield retail touch points across the country including regular stores and studio stores has crossed the 2,000 mark, standing at a total of 2,056 stores.

Let me now turn to international operations. The Argentina CKD operations. With a focus on expanding global presence, your Company has started setting up Completely Knocked Down (CKD) facilities in key export markets. The first such facility was established in Argentina. Your Company achieved a great feat by successfully starting operations in pandemic time through an entirely digital coordination. Royal Enfield has state-of-the-art production facilities in Chennai, which is in India (Vallam Vadagal, Oragadam and Thiruvottiyur), as well as technical centres in the UK and India housing the best teams from across the world. Together they conceptualize and manufacture motorcycles for India and international markets.

Moving to other global operations, expansion of the retail and service network in key geographies significantly improved accessibility of Royal Enfield motorcycles and enhanced brand visibility. Across regions, your Company continued to strengthen the network by securing a number of successful conversions of bigger and quality dealers. This was supplemented by an assertive drive to set up more Royal Enfield exclusive stores and further enhance the holistic brand experience for the end customer. Your Company increased its exclusive store count from 77 in 2019-20 to 132 in 2020-21 and Multi-Brand Outlets to over 630.

In the Asia Pacific region, APAC, as it is known, the overall footprint of Royal Enfield grew to 123 retail touch points with major expansion undertaken in Thailand and Australia. Along with expansion of footprint within the region, your Company also forayed into Japan and Cambodia during the year. Japan is a critical two wheeler market with high potential for old school, classic-style motorcycles. Similarly, Cambodia is one of the most sought after motorcycling destinations in the world. In the APAC region, the rental business model also plays an important role in managing the 'Usership before Ownership' facet. Hence your Company has tied up with leading rental partners to provide the motorcycle enthusiasts with an opportunity to explore the region as well as experience Royal Enfield motorcycles.

The Americas region performed very well in 2020-21 and has huge potential for Royal Enfield. The regional team worked on expanding the retail network and ended the year with around 50 exclusive stores and over 180 MBOs. Royal Enfield entered the Mexico market in July 2020 and expanded the exclusive store network to 7 outlets after considering prospects.

The European region is one of the largest markets for Royal Enfield outside India and has been delivering well. The region also has the largest distribution network with about 420 retail outlets including 36 Company exclusive stores. Your Company added stores in almost all the major markets including the UK, France, Germany and Italy during the year.

Now let me move to VE Commercial Vehicle. Operational results in terms of VECV sales volumes. VECV has just completed what has probably been one of the most challenging years in its history. With the announcement of lockdown, in April, 2020, a downside Business Plan was prepared quickly along with a detailed action plan to combat the crisis. With the involvement of every team member of VECV, several actions were implemented.

This is an excerpt of the original content. To continue reading it, access the original document here.


Eicher Motors Ltd. published this content on 20 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2021 10:10:17 UTC.

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Sales 2022 105 B 1 399 M 1 399 M
Net income 2022 18 448 M 245 M 245 M
Net cash 2022 88 630 M 1 176 M 1 176 M
P/E ratio 2022 36,9x
Yield 2022 0,78%
Capitalization 685 B 9 081 M 9 088 M
EV / Sales 2022 5,66x
EV / Sales 2023 4,21x
Nbr of Employees 5 005
Free-Float 47,0%
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Technical analysis trends EICHER MOTORS LIMITED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 39
Last Close Price 2 504,65 INR
Average target price 2 781,95 INR
Spread / Average Target 11,1%
EPS Revisions
Managers and Directors
Siddhartha Vikram Lal Chief Executive Officer, MD & Director
Kaleeswaran Arunachalam Chief Financial Officer
Srinivasan Sandilya Non-Executive Chairman
Manhar Kapoor Secretary, Compliance Officer & General Counsel
Manvi Sinha Independent Non-Executive Director
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