| Category | Parameter | Wt. | Score | Notes |
|---|---|---|---|---|
| Quality | Business Quality | 10.00% | 8.5 | 📌 Upstox Q1 FY27 Results, Jul 2026 Global leader in mid-size (250–750cc) motorcycles via Royal Enfield, which posted its highest-ever quarterly sales of 332,940 units (+27.4% YoY) in Q1 FY27. VECV (Volvo JV) also logged its best-ever Q1 commercial vehicle sales. |
| Quality | Management Quality | 10.00% | 7.5 | 📌 Screener.in; Finology Ticker, 2026 Long-tenured promoter group (Eicher/Lal family), governance strengthened by the Volvo JV structure on the commercial vehicle side. Consistent, conservative capital allocation track record over multiple cycles. |
| Quality | Growth Visibility | 10.00% | 8 | 📌 Upstox; Whalesbook, Jul 2026 Board approved a ₹1,225 Cr greenfield plant in Andhra Pradesh to expand capacity; entry into EVs via the 'Flying Flea' brand with deliveries starting mid-2026. International markets and exports are an additional growth lever. |
| Quality | Moat | 10.00% | 8 | 📌 ScanX; Brand Finance 2026 Royal Enfield ranked the world's 3rd-strongest automobile brand by Brand Finance in 2026. Commands a dominant share of India's mid-size motorcycle segment with strong pricing power and cult-like brand loyalty. |
| Quality | Capital Allocation | 6.67% | 7.5 | 📌 Screener.in, 2026 Healthy dividend payout (~35–37%) alongside self-funded capacity expansion. ROCE has averaged 30%+ over 3 years, though recent quarters show some moderation as new capex is deployed. |
| Quality | Balance Sheet | 6.67% | 9 | 📌 Screener.in; Craytheon FY26 Virtually debt-free — Debt/Equity of just ~0.02, interest coverage over 100x. FY26 net profit margin of 23.6% on ₹234 Cr consolidated revenue base reflects a very clean balance sheet. |
| Quality | Risk Profile | 6.66% | 6.5 | 📌 IndMoney Valuation Note, Jul 2026 Commodity/input cost inflation is pressuring margins at the VECV (commercial vehicle) segment. Export markets face temporary macro headwinds. Execution risk around the new EV line is unproven. |
| Price | Valuation | 13.33% | 3.5 | 📌 IndMoney; Sharpely.in, Jul–Aug 2026 Trading at ~37x trailing PE versus an industry PE of ~30x, with a PEG ratio of ~2.16 — priced for continued strong execution. Not egregiously overvalued against 5-yr growth, but a 3-yr trend suggests the market is pricing in a lot. |
| Price | FCF Yield | 13.33% | 5 | 📌 TipRanks Cash Flow Ratios, 2026 TTM free cash flow of ~₹2,941 Cr against a ~₹2,00,000 Cr market cap implies an FCF yield of ~1.5% — modest but genuinely positive, reflecting heavy ongoing capex (Andhra Pradesh plant, Flying Flea EV) rather than a cash-generation issue. |
| Price | Reverse DCF | 13.34% | 5 | 📌 BOB Capital Markets; UBS Target Note, May 2026 Analyst targets span ₹7,431 (BOB Capital, Hold, +6%) to ₹8,550 (UBS, Buy) against a CMP near ₹7,600-7,800 — implying the market is pricing roughly 10% EPS CAGR through FY28E, a demanding but not unreasonable ask given Eicher's ~22% 5-yr revenue CAGR track record. |
| Quality 60.00% / Price 40.00% | 6.53 | |||
| Trigger | Action |
|---|---|
| Valuation correction toward ~28–30x PE (closer to industry average) without a change in growth trajectory | Add |
| Flying Flea EV line shows credible early traction (order book / delivery ramp) | Review |
| VECV margins recover alongside continued Royal Enfield volume growth | Add |
| Metric | Current | Historical | Source |
|---|---|---|---|
| PE (Trailing) | ~37.4x | Industry PE ~30x | IndMoney, Jul 2026 |
| EV/EBITDA | ~33–36x | — | Sharpely.in, Jul 2026 |
| ROCE | ~31% | ~32% (3-yr avg) | Finology Ticker, 2026 |
| Revenue Growth 5 Years | 21.83% CAGR | — | Sharpely.in, 2026 |
| Promoter Holdings | 49.06% | Stable, no pledging | Finology Ticker, Dec 2025 |
| FCF Yield | ~1.5% | — | TipRanks Cash Flow Ratios, 2026 |
| Competitor | Segment | Threat |
|---|---|---|
| Bajaj Auto (KTM / Triumph JV) | Premium / Mid-size Motorcycles | High |
| Hero MotoCorp (Harley-Davidson JV) | Premium Motorcycles | Medium |
| TVS Motor (Apache / RTR) | Premium Motorcycles | Medium |
| Tata Motors / Ashok Leyland | Commercial Vehicles (VECV competitors) | Medium |
| Honda / Yamaha | Mid-size Motorcycles | Low |