Eicher Motors Ltd (NSE: EICHERMOT) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
B. Govindarajan — MANAGING DIRECTOR
Vinod Aggarwal — Vice-Chairman, Motors and MD Chief Executive Officer
Vidhya Srinivasan — Chief Financial Officer
Analysts:
Hitesh Thakurani — Analyst
Chandramoli Matiy — Analyst
Kapil Singh — Analyst
Kanjan — Analyst
Amin Pirani — Analyst
Pramod Kumar — Analyst
Yash Agarwal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Aisha Motors Q3FY26 earnings conference call hosted by HDFC Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Hitesh Thakurani from HDFC Securities Limited. Thank you. And over to you sir.
Hitesh Thakurani — Analyst
Thank you. Good evening everyone. This is Hitesh Thakurani from HDFC Securities. Appreciate everyone logging into this three QFY26 earnings calls of ISER Motors. From the management team, I’m pleased to host Mr. Vinod Agarwal, Vice Chairman, Aisha Motors Ltd. Maryland CEO VE Commercial Vehicles Ltd. Mr. B. Govindrajan MD Ayesha Motor Ltd. And CEO Royal Enfield. And Ms. Vidya Srinivasan, CFO Ayesha Motors Ltd. I’ll now hand over the call to Mr. B. Novindrajan for his opening remarks and post which we’ll begin the Q and A. Over to you sir.
B. Govindarajan — MANAGING DIRECTOR
Thank you Hitesh. Hello and good evening everyone. Happy New Year. Hope it has been a Good start to 2026. Thank you for joining us today at the Aisha Motors Limited earning call for the quarter ended December 31, 2025. December marked the close of a significant year for iShare. One that saw consistent performance across our businesses, important milestones for Royal Enfield and continuous progress at VE Commercial Vehicles too. The third quarter was shaped by launches, events and community led initiatives. And we continue to witness high customer confidence and trust in our brands. Before we move into the detailed business updates for Royal Enfield and vecv, I’ll begin with a broad summary of the overall financials.
EML consolidated financials for the third quarter FY25 26. Our revenue for Q3 is at about 6114 crores marking a growth of 23% over rupees. 4973 crores from Q3 last year. EBITDA stands at about 1557 crores marking a growth of 30% over 1201 crores in Q3 last year at 1421 crores up by 21% from 1171 crores in Q3 last year. Please note that that includes share of profits of BECV which for Q3 stood at about 183 crores. This strong performance was a result of an all round growth both at Royal Enfield and becv. Let me begin with the business highlights for Royal Enfield.
This quarter was yet another robust one for Royal Enfield. Continuing our steady growth journey of the past six quarters, the third quarter of this fiscal year saw a robust volume growth, strong fescue demand and meaningful progress across our products and community led initiatives. What made it even more special was the commencement of our 125th year celebration, a milestone that reflects the strength of our legacy while reinforcing our commitment to shaping the future of pure motorcycling at the core. It’s our community that continues to be part and heart of everything what we do. Motorburst this year was bigger and bolder than ever, welcoming a record of 40,000 plus people over the three days event.
We also took another step in expanding our cultural footprint beyond the motorcycling community with the second edition of Journeying across the Himalayas, which grew in scale, depth and impact across both domestic and international markets. We saw a very healthy momentum driven by refreshed products, global showcases and continued engagement with our riders. This collective effort helped us cross the milestone of 1 million motorcycles year to date, much before the close of this financial year, a moment that truly belongs to our teams, partners and our riding community across the globe. Coming to the volumes during this quarter we sold 3.25,773 motorcycles with a growth of 21% as against 2.69,039 motorcycles in Q3FY 2025.
Out of this in India we sold about 3 lakh 426 motorcycles with a 24% growth from the last year. We continue to gain market share across both, particularly in the middle sized motorcycle segment where Royal Enfield has been able to continue its dominance at 88.9% exit market share. Domestic sale remained healthy across all three months with a double digit growth supporting strong year to date growth driven by sustained retail traction. The festive season was a strong one for Royal Enfield with customer enthusiasm translating into a robust demand across markets. We delivered over best ever trustee performance, selling over 2.49 lakh motorcycles during September and October.
Our focus strategy combined with a strong product portfolio marketing activations have really helped us deepen our presence in the market in this quarter. Coming to the international markets, our volume stood at about 25,347 units versus 27,000 units in Q3 last year. We continue to maintain a strong growth momentum in retail volume across international markets like Brazil, Argentina and Thailand. Product momentum was further strengthened with the launch of the refreshed Hunter 350 under Scram 440 in Nepal, Vaer 650 in Argentina and Guerrilla 450 in Brazil. To resonate with the young urban riders, the first Royal Enfield exclusive store opened in Lima, Peru in December 2025 at EICMA.
This year, Royal Enfield marked an important milestone as we entered our 125th year of pure motorcycling. The showcase reflected our journey and vision, bringing together our heritage with a clear view of the future. We presented several key motorcycles including the Special edition of Classic 650, the new Bullet 650, the Himalayan 450, Mana Black Shotgun with rough crafts collaboration in limited edition and the Flying Fleet S6 on our electric platform which together highlight our approach to design, capability and innovation. The response from the riders and enthusiasts globally has been encouraging and deeply motivating for the team.
At Motor Verse, we launched the Meteor 350 Sundowner Special Edition celebrating a global Meteor community that now exceeds half a million riders. Beyond motorcycle, we continue to strengthen our pure motorcycling ecosystem with meaningful cultural collaborations. This included a unique partnership with Royal Albert hall in London and a composer, Rushal Ranjan for the Ballad of the Bullet, the official campaign film marking the launch of new Royal Enfield Bullet 650. We also expanded our lifestyle and apparel offering with Royal Enfield Velon Moto Aviators Collaborations in new Lifestyle Eyewear range which is premium add on for riders who see their glasses as part of their motorcycling kits on an everyday life, we continue to create memorable riding experiences for our community.
We concluded the 2025 edition of Motovers in Goa with as I mentioned, 40,000 plus riders over the three days with builders, artists, musicians and explorers coming together from across the globe in celebration of a motorcycling culture. We also concluded the season five of Continental GT cup, strengthening our presence in grassroots racing and performance led motorcycling. The addition drew over 6,000 registrations marking a sharp increase since last year and this year we had gone to eight cities to have this Continental GT cup celebration alongside competitive motorsport, rider led journeys and community rides continued across regions including Bhutan and Sikkim, reinforcing our belief that shared experiences and camaraderie are the heart of pure motorcycling.
To improve ease of purchase, we announced a partnership with Amazon India enabling customers in select cities to buy Royal Enfield motorcycles online through seamless end to end digital journey for the 350cc range. This comes after the successful tie up with the Flipkart. We continue to be one of the top automakers across the leading ESG rating currently 93% of our electricity consumed across our facilities is green electricity. We achieved 80% reduction in emissions intensity in our operations COP1 and 2. Our net water positive continued to be strong at 4.6 on the water balance index. Through the Royal Enfield Social Mission we have recently concluded the second edition of Journeying across the Himalayas, a week long multidisciplinary festival focused on celebrating and safeguarding the cultural and the natural heritage of that region.
Launched the Great Himalayan Exploration within UNESCO reaffirming our long term commitment to cultural preservations, responsible tourism and community led engagement. Now on capex. Lastly, as you would have seen in our results, EML Board has just approved a proposal for capacity expansion at Royal Enfield. This will be achieved through a brownfield expansion at Chiar manufacturing facility at Tamil Nadu taking our annual production capacity to 20 lakhs units per year from the current 1.4 million to meet the rapidly expanding and existing and the projected future demand. The project is aligned with our consistent growth focus and underscores our commitment to the evolving needs of our global community.
For this expansion we will invest an estimate of almost 958 crores over a period of 2 years reaching the target capacity by FY2728. By scaling our existing tier plant we are ensuring a faster capacity ramp up and cost efficient operations. Now I will hand over to Mr. Agarwal to talk you through the updates of VE Commercial Vehicles over to you.
Vinod Aggarwal — Vice-Chairman, Motors and MD Chief Executive Officer
Thank you Govind. I’m pleased to share that BECV has delivered its best ever third quarter performance reinforcing our position as a resilient and future Ready TV player. India’s macroeconomic environment remained supportive through Q3. Strong government capex in roads and infrastructure, GST and income tax reforms and contained inflation helped improve customer confidence. With fiscal stability and continued policy support for domestic manufacturing, the commercial vehicle industry saw healthy momentum heading into the second half of the year. Against this backdrop, BCV recorded Q3 volumes of 26,086 units, a 24.2% growth year on year, taking our YTD performance to 69,597 units, a growth of 13.2%.
This marks our strongest ever quarter.
B. Govindarajan — MANAGING DIRECTOR
3.
Vinod Aggarwal — Vice-Chairman, Motors and MD Chief Executive Officer
We maintain number one position in LMD trucks with Q3 sales of 12,447 units which is 28.3% growth year on year and market share of 34.5%. The Pro plus upgrades and uptime promise continue to drive preference. Our heavy duty trucks sales grew 14.9% reaching 6,850 units in Q3 the best ever third quarter supported by infrastructure execution and improved route economics. Bus sales were at 3,624 units which were down 3.3% year on year on tender timing. Underlying market sentiments remains positive for Bassey as well. In our parts business, both Hyshare and Volvo combined we recorded a robust growth of 810 crores which is 14.4% year on year growth aided by higher vehicle utilization and deeper service penetration.
Exports in Q3 were 2056 units which is 72.5% year on year growth on better traction in select markets. During the quarter we advanced our strategy on portfolio readiness. We complemented our SCV entry with launch of Ishare Pro X Diesel worldwide new E440 9X2 engine focused on best in class efficiency, comfort and uptime for city, near city logistics and key applications in E commerce, fmcg, cold chain, fresh produce and courier. Our network footprint crossed 1150 plus touch points with continued east market focus, Container support across 14 highways, 13 new service sites in Q3 and 20 operational Pro X setups and whereas letter of intents we have given for another 21 unit 21 setups now servicing 21,500 plus vehicles nationwide throughout the quarter.
Pricing discipline, operating leverage and cost reduction supported margin growth Coming to VCV Financial performance We continue to improve financial strength with profitable growth. Our revenues for Q3 are 7019 crores against 500801 crores last year. EBITDA margin for Q3 is 652 crores as against 517 crores last year. WIDA margin for Q3 9.5% against 9.2% last year. PAT for Q338 crores against 299 crores last year. The medium term CV outlook remained constructive supported by infrastructure development, stable financing and domestic manufacturing push. With future ready products expanding alternate energy portfolio service coverage, VCB is well poised for resilient growth.
Thank you for being with us on the call today. We can now move to Question Answer session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue ladies and gentlemen. We will wait for A moment.
While the question queue assembles, The first question is from the line of Chandramoli Matiya from Goldman Sachs. Please go ahead.
Chandramoli Matiy
Hi, good evening and thank you for taking my questions. My first question is just around the margin performance. So this appears to be the first time in almost five to six quarters where we’ve seen sequential improvement in gross margin and sequential reduction in other expenses. So I just want to understand what drove this. And also if you could elaborate a little bit on whether this could be potential inflection point in your margin journey, given that over the past five to six quarters we’ve built up critical scale and volume now potentially comfortably above a million units per annum.
And what that means for value engineering and sourcing scenarios.
Vidhya Srinivasan
Vidya, you know. Yeah, I think Chandramoli, you know, I’ve been kind of consistently talking about the same message from a margin standpoint. Okay. In 2022, as you know, on the sidelines of the Hunter launch, we had pivoted to rebalance and there we had talked about our focus on growing absolute volumes, absolute margins. And that’s essentially what we’ve delivered since then. If I take the 12 quarter period, our volumes have grown by a CAGR of 14%, our revenues have grown by 18%, our gross profit by 20%, EBITDA by 22%. Okay. And therefore consistently we’ve kind of looked at growth and that’s what the management is focused on delivering even as we go forward.
So I think that is broadly, you know, the point that we wanted to leave specifically. If you look at, you know, some of the impact, obviously we’ve had a great quarter from a volume standpoint. So I think, I mean, we can get into the detail, but I think this is a larger message that I wanted to leave you with.
Kapil Singh
Yeah.
Chandramoli Matiy
Got it. Specifically comment on what drove the margin improvement at a gross margin level. And then also what do some of the other expenses control?
Vidhya Srinivasan
Yeah, I think versus if you take other income from. I mean, it’s literally a bit of timing also which is coming through because we’ve had timing of spend in different quarters. But you know, we can get into more detail as we, you know, separately there is an operating leverage which is also kicking in. Right. And I think some marketing spends, we’ve had more spend in the second quarter versus third quarter. So some of that is a timing piece. We’ve also had operating leverage as far as overheads are concerned, for all that is kicking in as far as other expenses are concerned.
B. Govindarajan
So primarily number one is operating leverage, as Vijay was mentioning. And Fiscal discipline on the expenses. In fact even the marketing expenses we have done ahead planning for this season which has also helped us in looking at an unit benefit model mix has helped VAV has kicked in. So overall it’s been well executed. Profitability.
Chandramoli Matiy
Got it. That’s helpful. My second question is just on the capacity expansion that was announced. If you could help us understand.
Kanjan
What.
Chandramoli Matiy
Part of this would be focused on the 350cc and sub 350cc portfolio which is where we’ve seen a meaningful pickup in demand over the past 12 to 18 months and what part is the 350cc plus portfolio? And also I think you’ve mentioned that this is going to be capacity expansion over an eight quarter period. So is it going to be sort of linear through that period or do you expect it to be concentrated in certain points during that period?
B. Govindarajan
So generally first and foremost is I think you’re right. The 350cc demand has gone up post the GST thanks to the reduction and the 450cc and 650cc had slightly come down but the rate of recovery is better. We are happy about that. So for 450cc and 650cc there is a capacity which is built which is good enough because currently the utilization is slightly lower. With the debottlenecking and bit of automations we can cater into the coming year growth and 350cc obviously because during the festive time itself compared to last year we grew almost 50% with the higher base itself.
So there is a demand for the 350cc which is continuing and back of it today we actually presented to the board about the CAPEX requirement which is there the past designers which is already existing place for us. So that’s why it is a brownfield project. If you recall the last quarter when we were discussing we also have gone ahead with one module for about 100 odd crores which we have invested to come out with some capacity additional requirement for the Q1 itself. So that is going to kick in now and this investment which we are doing in modules will start kicking in in various stages depending upon the lead time.
But it’s all mapped to the peak requirement which is required for fest and to that extent all the other periods the availability will be better. So over the period of time though we have given almost about 8/4 time will be slightly ahead. We will build the overall capacity to almost 2 million motorcycles.
Chandramoli Matiy
Got it. That’s helpful. And just lastly if you could give us some color around you freight deal and US trade deal. These have in the past been important markets for the 450 and the 650cc portfolio. So if you could just give us some color on how you’re looking at these trade deals and what that represents for your business plan going forward.
B. Govindarajan
So let’s go one by one. First is about the USA which we asked. Currently it’s almost about 50% plus there was some speculation of higher taxations and this and that. With the latest trade deal which has been done, the rate is 18%. However there is a steel and aluminium tariff that there is no clarity as of now we are waiting for more clarity on that. With that the weighted average tariff is almost about 41 to 42% currently. If that goes off, mostly it will go off. That’s what is we are expecting in the fine print.
Then it will become an 18% for us which is a good sign, it will open up the market for us. But the steel tariff which is there, which is common for everybody. So whoever is importing into the us.
B. Govindarajan
So it’s a common denominator for all.
B. Govindarajan
As far as EMEA is concerned.
B. Govindarajan
Currently we are at almost about 6% duty structure. Once again the clarity is being sought. Mostly that will also go off. It will help us to be accessible even in the Europe market. So that way we are even waiting for the fine prints to be there available with us to get the full clarity. We are assuming directionally as I mentioned, USC at 18%, EMEA knocking out 6%. That will be the scenario.
Chandramoli Matiy
All right, that’s helpful. Thank you very much and all the best.
B. Govindarajan
Thank you.
operator
Kapil Singh Kapil Singh Thank you. A reminder to all the participants, please restrict yourselves to two questions. The next question is from the line of Kapil Singh from Nomura. Please go ahead. Kapil Singh
Vinod Aggarwal
Yeah, good evening sir and congratulations on a very strong performance. I just wanted your view on the industry growth, especially for premium industry. How are you thinking for Q4 and next year and do you expect growth in the more than 350cc portfolio also when you are looking at next year? Or do you need to take some actions there to come with lower engine CC options to drive growth in that segment? Just some thoughts there.
B. Govindarajan
So in Q4 I’m expecting the growth momentum to continue. Inquiries are better, conversions are better, bookings are good. So there is a positive trend which is continuing. So Q4 also we are positive that we will be growing more coming to the next year question which we are talking about. I think the whole industry is looking at high single digit, that sort of the growth and the Premium segment will grow. We will continue to outgrow the market. That’s our ambition. And with all the products which are getting lined up and top of it, this is the 125th year of our brand and there is going to be a mother brand marketing campaign which will actually take our brand to a different level.
And we also have products lined up for the coming year. So with that we are very, very optimistic that our growth will continue.
Vinod Aggarwal
On the more than 350cc portfolio.
Kanjan
Any comments?
B. Govindarajan
More than 350cc? I mean honestly post the GST there.
Kapil Singh
Is a huge drop just pre GST between August 15 to September 22. There is a lot of pre buy which has taken place so the numbers may be slightly skewing but at pre buy post that there is a there was a huge drop.
B. Govindarajan
We have passed on whatever the GST rates which are there. We just went into the market asset is at about 40%. So the the growth was dipping. It went as good as almost about 40%. But the rate of recovery of 650cc started showing the positive sign within about a month’s time and 450cc started showing the rate of recovery now. So with the Classic 650 which are launched, Bullet 650 which we have launched now, the inquiries for Classic 650 and Bullet 650 is also healthier so that is also going to grow. We just finished the GT cup racing across about eight cities which has really helped us to create sort of an interest across.
We launched Mana black in the 450cc on the Himalayan platform that has also kindled the interest in the product. So overall there is a positivism which I’m seeing in the inquiry level conversions are also coming up. That’s why I said rate of recovery is better. Have we come to the same level like the earlier time pre GST level? No, but are we seeing a traction that we are reaching there? Yes. 650 is faster and 450 is following that.
Vinod Aggarwal
Okay, great. And so one question was on the gross margin just trying to understand what drove the improvement. If you could give some color on the commodity price movement for 3Q and what is the outlook you’re seeing for 4Q and same for pricing as well.
B. Govindarajan
You want to add.
Vidhya Srinivasan
Yeah. So as far as gross margin is concerned, if I take the period for this quarter versus the previous year same quarter we’ve had increase in cost, overall improvement in GC due to domestic model mix is about 0.6%. We’ve got 100 basis points on account of increasing cost due to OB2B norms. We’ve also had a 70 basis points which is a net impact of commodity inflation which is offset by around 20 basis points which is an account of value engineering etc. So the cost increase largely is driven by the increase in precious metals which we had aluminum as well as copper.
Then we’ve also had about 40 basis points which is impact of model variant, geography, mix etc. But all of this has been offset by about 140 basis points which is an account of price increases that we’ve taken in April as well as July on select models, case by case basis.
Kapil Singh
Yeah, it’s as Vijay is mentioning, there is a price increase which we have taken April 1 tranche, then in July 1, then commodity inflation offset to some extent through the pricing increase model mix and that’s what has actually driven the gc.
Chandramoli Matiy
Yeah.
Vinod Aggarwal
Sir, any outlook for next quarter on the commodities?
Kapil Singh
Look to an extent of commodities it is not cooling off equally I must say it is not also heating up. So it is some weeks it is neutral, some weeks it is shooting up. But there will be a bit of a pressure on the commodity for some more time, that’s for sure. But we also have value engineering pipeline which is kicking in continuous.
Vinod Aggarwal
Okay, I assume no pricing changes have happened, right?
Vidhya Srinivasan
I think January we’ve also taken some select models so we are slowly looking at our entire portfolio. And obviously as we talked about it in the past also we are not taking aggressive price increase focus continues to be growth. But wherever we are finding significant sharp commodity moment, we are taking on a case to case basis. So yeah, we have taken a bit in January as well.
B. Govindarajan
Price increase discussions all. As we have been always saying we are adding value back to the product and that’s why value for money, perceived value for money has to be good for Royal Enfield product. Everybody should want desire to own one at an accessible price point. We are very cautious of it so we will go accordingly what is right at that point of time in price increases. But yes, in January also we took a price increase on select models.
Vinod Aggarwal
Okay, thank you so much and best wishes sir.
B. Govindarajan
Thank you.
operator
Thank you. Participants are requested to limit their questions to two at a time. The next question is from the line of Kanjan from Bank of America. Please go ahead.
Kanjan
Thanks for taking my questions. Just a quick follow up to, you know just on couple’s question on the pricing hike, is it possible for you to quantify what sort of increase we have taken? And also on the value engineering, do you mention 20 basis point y and Y improvement that you’ve, you’ve seen on, on that front. If you can just give us little bit more outlook on how do we think about value engineering? Is there, you know, is there a number that you can put that this is the sort of benefit that can come through with the scale that we are seeing on 350cc platform?
Vidhya Srinivasan
Yeah. So as far as January price increase is concerned, I think I would say a blended model price increase of about half a percent. And as far as value engineering is concerned, as we said, we talked about 0.2%. It’s very difficult to quantify exactly how it’s going to pan out in the following quarters because it really depends on what is going to get implemented in each quarter. So I won’t necessarily be able to guide to that extent. And in terms of what price increases we taken last year, which is April and July, as I said, we talked about 140 basis points that you know, across both this thing, across models.
Kanjan
Yeah, got it. And this value engineering understand no quantification but directionally. Can you share some qualitative thoughts around what is it? Is it the scale benefits, is the sourcing benefits that you’re seeing from the suppliers or is it modular platforms? You know, some qualitative color will help in terms of directionary thinking that there is more cost lever to play out over the next few quarters.
B. Govindarajan
So yeah, one is the scale which is a straight line equation. When the scale comes in we do get something. The second is we also identified low cost country sourcing different places in some of the electrical items. Along with starc, we are also trying to see which country is better, why is it better. So we are also looking at that the third element of the value engineering is as. Because the platforms, the J platform, K platform, P platform are all very well matured now in all the products with the bullet being the last product for changeover.
Now the value engineering we can be more aggressive in terms of weight reductions, in terms of optimization and in terms of the precious metal usage in the catalytic converters, all those different projects which are done. The funnel is very healthy and it all is under testing. So value engineering will keep kicking in at different point of time, but we’ll be cautious in implementing it because when you’re doing a higher volume, we don’t want to have anything at the front end having two different kind of a vehicle. So we have to be careful about it. So we will time it accordingly.
But the value engineering exercise is aggressively on.
Kanjan
But if I can just ask last Question on this call Spit. There used to be a huge intensity of precious metals after Covid. Right. And you all were working to optimize the intensity reduce where possible. Is it possible to share how much is precious as a percentage of either the total RM or net sales? Whatever way you can give us some.
B. Govindarajan
Sense, we’ll probably send it to you. Gunjan. I mean I may not be having it immediately now but I can tell you one thing is precious metal. We mapped it for next year almost about four quarters. How it will be based on what rebuy which we can do, how much we can do that as a hedging away. So all those activities are started because we are expecting that to go slightly higher but we are protecting so that it is not hitting us as a.
Kanjan
Headwind and just shifting to exports if you can. You know, if I look at the last few months of trend as the base has caught up, we have clearly seen the growth also, you know, temper down a bit directionally. How should we think about export growth now? You’ve of course pointed out in part that there is end market weakness in some of the mature markets. But how do we think about growth? I know the FTA will kick in, but that’s still some time away. Right. But more from next one year perspective, what sort of growth we should think through for this business.
Kapil Singh
As I always mention international market for oil. Enfield has to be seen from a country by country can be that one outside India. What is the business? If I have to tell you some developed markets. Let’s take USA with all the confusions which is getting sorted out probably once the tariff is coming to 18%. Yes we will see some growth which is happening. The product like Baer 650 Super Meteor 650 and now the new products which are lined up and the Himalayan it has a very good reception in United States as a whole because everybody are looking at only for these sort of motorcycles which are very accessible at a sweet price point at a BIS quality.
So Royal Enfield caters there. So there is a possibility for us to grow in that market once the market stabilizes. Let’s talk about Europe and UK and especially I must tell you it’s a. It’s, you know, internally we call it as a market adjustment year probably I will call it as a calibration year fundamentally because OBD2B the entire vehicles which were available, which I also cautioned last meeting also or last call is that there will be huge pre buy and the registrations which will be there, which all will be available at the discounting which we haven’t done.
But we are competing in a market which has a very huge discount because of the pre registration vehicles. That’s why I’m saying it’s a year of calibration. We are consciously looking at how do we grow in that market. Italy is doing well for us, so there is a focus on Hunter hoods and all those things in Italy. And as well as the other market is about Latam. You know, Argentina and Colombia, the growth is continuing. Brazil is an Artstar. In fact at Brazil Guerrilla got the motorcycle of the year. Himalayan won the trial bike of the year and we are number two position in the middleweight as of now.
So we have been consistently growing and I do see that’s one such market which is going to really, really garner volume for us. We are going to have our own CKD with assemblers, two assemblers which we are doing now. We are consolidating. We will have our own CKD facility there soon. So Brazil is one such big market and we are investing heavily in that market. Epac it is so. So because Thailand last year which had its own issues, now we are seeing some amount of growth which is there. SARC is another one area. The terrain is very good.
That’s why first the basics have to be set right in that area, especially Bangladesh and Nepal. We have signed up with the distributors, we have identified the dealer locations, spare parts, CKD facilities. All those things are done, dusted and now the team is in place. But we are cautiously moving in our marketing campaign depending upon the political situations and the which are taking place. We don’t want to be overtly there. So we will go cautious about those areas. But that’s another one market. So international market. As I have been always maintaining cautiously optimistic market by market there will be a growth but you have to continue to be focusing on the brand building which we will use the overarching 125th year celebration.
So we are going into some markets like Brazil. We are going to be there in Sao Paulo and Rio. There we will do the market activations with maybe Hunter, Himalayan. That’s how we feel that we can be in the market and grow the market. So maybe coming here, as I mentioned, calibration and growth, that’s what is for the international market.
Kanjan
Got it. This is really helpful. Thank you so much.
operator
Thank you. A reminder to all the participants, kindly limit yourself to two questions at a time. The next question is from the line of Amin Pirani from JP Morgan. Please go ahead.
Amin Pirani
Yes.
Hitesh Thakurani
Hi, good evening and thanks for the opportunity. Most of the questions have been answered. So just a few clarifications on the capacity expansion plan. So first of all the 1.45 million capacity that you have mentioned which is currently. Is it the capacity like which has just been you know reached right now or. This is something that we always had because we are going to do some debottlenecking at the existing lines.
B. Govindarajan
So I mean just the clarity. 1.2 million is a declared capacity. If you all know.
Hitesh Thakurani
Okay.
B. Govindarajan
I’ve been saying 1.2.
Hitesh Thakurani
Yeah.
B. Govindarajan
And about 100 crores which was, which was actually cleared by board about two months back which we said the first quarter which will start kicking in. So that will be in another about one one and a half months time. That’s where the bill capacity goes almost about 14.5 lakhs. Sorry. Yeah, 14.5 lakhs. 1.45 million. But we are seeing the growth momentum continuing. That’s why we are not waiting for the actual SBP cycle and all. Today in the board we presented about the CapEx requirement for further taking it to 2 million. So we are kick starting that starting today borders cleared the investment of about 958 crores.
We are TR we have planned all those things for that expansion. So that’s going to be a brown field but it will be in module which is required for every month growth at what point of time, what is the bottleneck and that has to be focused and brought in. So we have a principal clearance for about another taking it to 2 million motorcycles. It’ll all start this activity. That’s why we said in eight quarters it will keep coming in because it’s not going to come in one quarter. That’s also not required. So it has to come in over the period of time especially for the, the festive peak seasons and all.
So that will start kicking in quarter by quarter.
Amin Pirani
Okay. Okay. And. And basically the whole 2 million capacity will be available to us in the beginning of fiscal year 29. Is that the correct understanding?
B. Govindarajan
Yeah. You take yes. Am I?
Hitesh Thakurani
Yeah. Yeah. Okay. And just as we go from this 1.45 to 2 million just want to get your sense as to do you have any broad targets or plan as to how much of that could be domestic or exports. And the reason I’m asking that question is that for you as well as for a lot of your peers from India, it appears that a lot of the export growth will also happen through investments that one will have to do in all of these markets like some CKDs in some market, some other, you know, facilities in some other market.
So just wanted to get a sense as to, you know, do you. Do we see the export share based on this capacity expansion also going higher over the next three, four years?
B. Govindarajan
First and foremost, I mean the CKD has to go from India. So the base capacity has to be generated in India. The amount of work in which we will be doing it outside India, it may. It’ll make no sense to because the cost will be higher. So it has to go from India. So the cost advantage which is there. So the fundamental base capacity which is required to take it to 2 million majority will be in India only and that too in JR because that is where the brownfield opportunity is there for us. So we have to go faster for implementation.
We will be doing it as far as the CKD investments are concerned, most of the markets, as I’ve been saying in the last two years, we are setting the base ready for future to once the market opens, we will ride on it. One is about the Brazil. We have two assemblers but we are consolidating and making it a bigger one. So that is already baked in those expenses. It’s a cash flow for this year. And in Thailand we have Argentina, we have Colombia, we have Bangladesh, we have Nepal, we have. And we are also looking at Mexico and all if it is required.
So in all those areas, playbook from us is fully, fully ready. But to answer you in one line, the base capacity enhancement has to take place at Chennai, India. That is what is going to feed the plant.
Hitesh Thakurani
That’s very helpful, sir. I’ll come back in the queue.
Kapil Singh
Thank you.
operator
Thank you. The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead.
Pramod Kumar
Yeah, thanks. Thanks a lot. My first question is on the current daily production, your vendor’s supply. Understand how the next few months will plan out.
operator
We are unable to hear you. Your voice is muffled.
Pramod Kumar
Can you hear me now? Is it better?
operator
Please go ahead.
Pramod Kumar
Yeah, so no, my first question is to go in on the current production capacity. Because what we understand is demand is way higher than what you can supply. And there have been some holidays and all that last few months. But where are we on the daily production capacity run date and how do you look at February March production run rate especially given the very low delay inventory and any thoughts around working the weekends or something like that to kind of into the supply to the market.
B. Govindarajan
Thanks. Thanks, Pramod. Yes, the plant is running at at most 24, 7 now and it’s in a Full capacity, you know, all the. All the plants we are looking at wherever there is a possibility, if there is any leave or something like that, can we work on it with a special permission. Everything is being looked at because the demands are good. It’s a better situation and we have been growing. So to that extent our team is also fully geared up as far as the vendors which are coming. We have identified all the debottleneck areas which are required to ramp up in the vendor and investments.
We are having a pocket discussions with all the vendors and from 2 million capacity when do they kick in? And we have given a clarity to talk to their board. In fact today we have shot a mail to them also to start talking about and we have given a cadence of when you have to ramp up and all those capacities. It all will get aligned. If I have to tell you on a daily level, I think if I have to tell you, I’m sure you guys are seeing it. It’s last month we have done almost about 110,000 motorcycles.
So that divided by the number of working days. Yeah.
Pramod Kumar
No. What was it given? Pongal holidays. How many working days you had in January?
B. Govindarajan
It’s called. No. February and March. We don’t have much of holidays except the annual inventory which we have to do that diction. We will. And if I had to tell you, we are delivering almost about 4,300 to 4,400 vehicles per day.
Pramod Kumar
Okay. 43 to 4,400. Okay. And go in the. Any change in the demand context because like we had an issue with demand or accessibility. Now with post gst, what are the kind of. I don’t know if you answered this question, forgive me if you already discussed this but what is the change in the kind of walk ins and the quality of customers of the customer profile which has changed at what you’re seeing at the dealership and any. Anything to call out on rural versus urban. Are you seeing higher uptick in any one of the segments or what if you can just provide some qualitative flavor on the kind of demand you’re seeing and because you’re going ahead for a big expansion.
So I’m just trying to understand what gives you that confidence that just based on a GST cut whether this sustains or. I’m just trying to get some confidence on the demand. Read here.
Kapil Singh
Yeah, so Pramod, currently the demand is holding up. There’s a good inquiry. I always mention the funnel is from the website search. The search is very good. It does mean the interest on product Royal Enfield at the overall level is very good. That’s the starting point for that. Now when we come back into this, where is the interest showing? Is it in urban market or in the rural market or in the semi urban market? During this window, which we have seen and you all know, including the fmcg, urban was not growing. But now we are seeing even the urban markets are growing.
Urban markets are growing. Could be we are not able to attribute exactly to that, but probably the income tax cut which has come in, there is a positive sentiment which is there in spend. So to that extent I am seeing urban market also growing. Rural and semi urbans are really, really growing. So when there is a growth, then the next cut which we are talking about is which product is actually showing a lot of traction post gst. If I have to give you some color, all of our 350cc models are equally growing including Classic. The age profile because of the accessibility which has become better post the GST is for the Hunter.
So the Hunter age profile has actually dropped further. It has come to almost about 40% of the buyers who are buying Hunter as of now they are at an age group of almost 23 to 24. So that has drastically come down which used to be only almost about 34, 35%. There’s a huge jump 56 percentage jump which I’m seeing it in Hunter. So as in Classic, walk ins are increasing and that’s why I said when the interest is better, walk ins are increasing. All the products are actually having the traction. Bullet 350 last year phenomena had been earlier to that when we launched it was only in the bastion market.
Last year we went in for Pan India. Now Pan India where the bullet was not really accepted. Also the markets where the bullets are having a very high traction now. So our Hunter is growing, bullet is growing, Classic is growing. Now we have come up with the meteor on the 350cc even with the Sundowner. So the Meteor is actually growing because we completely did a refresh of the Meteor. It was showing a dip once again with the GST and with the new colorways it is actually going up in this as I mentioned more than 350cc there was a sharp decline post the GST tax increase.
But as I mentioned the rate of recovery of that is better. 650 has shown the recovery much higher than the 450. 450cc it is showing a recovery but it is slightly slower. For that market we have to do activation bit more. So we are starting with what is called As a Gymkhana or the 450cc where we are doing a rider training so that you can be a better trained riding personality and use a motorcycle to see how busy the motorcycle is we launched Mana Black which is also showing Himalayan is having some traction in this.
The Hunterhood as a function which we have been doing now across small towns Last year we did only three coming year we will be seeing it in more places where there is inquiries are bitter. Young audience are looking for something to celebrate. So we are taking the street culture onto a platform called Hunterhood. So with all the activities plus 125th year as the mother brand campaign which we are going to do that is what is actually giving us the confidence that yes, the growth is continuing and the momentum will continue. Inquiries are better. Our dealer principals discussions which we had, all of them are very upbeat about the overall market.
The middle size market itself is also growing. That’s a good thing. I mean if I have to talk about two years back we discussed will the middleweight be grown at some point. We also said it is rested on the leaders who have been having the highest market share. But now I’m seeing them overall the middleweight segment is growing. That’s a good sign. Thereby with the overall volume comes up there is a space for us to grow all the activities which we are doing. That’s the confidence and with that background only we requested the board for the clearance of the capex which the board has consented to go ahead with that investment and that’s what we are going ahead with that for fulfillment.
Hitesh Thakurani
Thanks a lot Govind, very, very, very helpful. Thanks a lot and best of luck. Thank you.
operator
Thank you. Participants are requested to restrict themselves to two questions at a time. The next question is from the line of Pramod Amte from Incred Capital. Please go ahead.
Chandramoli Matiy
Yeah, hi, thanks for taking my question. So the first question in regards to the CAPEX amount and the way you are calling it Brownfield, you are Normally announced a 20% rise in the capacity to 1.2 to 1.4. Now you are talking about 1.4 to 4 to 1. Almost at 2 million it’s like.
B. Govindarajan
Sorry, excuse me. Pramod, Pramod, your audio is not clear to us.
Chandramoli Matiy
Please can you hear me now?
B. Govindarajan
Slightly better. Go ahead please.
Chandramoli Matiy
No, I was saying when you’re calling it Brownfield it’s the capacity is moving up almost like a 60, 70% if I had to take it from 1.2 to 2 million. And the extent of CAPEX is also much, much leaner. As compared to a gross block, what are you doing differently as compared to a typical manufacturing setup to expand the capacity to get such efficiency in capital spending?
B. Govindarajan
Two things I think. One, I have to be looking at with the CAFE now coming in, how efficient and how fungible it is. So any of the investments which we are doing, we have to have that fungibility in mind. Second is more and more automations have to come in in these areas which will actually help us to get the cost advantages. Also because you can’t be looking at the labor arbitrage always. So we have to be looking at an IoT base which that’s what is the focus. Whatever the learning which we had from our existing plants like Oregon, because we are all in one place and the team is same.
So we have funneled out what improvements we can do at the manufacturing facility. Thereby we will give a differentiated product flexibility which has to be built in and it has to also be there when tomorrow the 450 goes up. What does it mean? How do we get the fungibility into this? Those are all the contours with which we are building this newer capacity.
Chandramoli Matiy
And the follow up is.
B. Govindarajan
Yes, sorry, go ahead, please go ahead.
Chandramoli Matiy
And also in terms of product profile, you feel the existing CC range will fulfill this such a large expansion or you would be looking at downsizing or how would we be looking at product profile to fill this entire 2 million?
B. Govindarajan
Our focus always had been the middleweight 250cc to 750cc. Currently we are at about 350cc, 450cc and 650cc. You will see the adjacencies which are there. But the demand as of now is on 350cc. So here and now the task in hand is how do I fulfill that demand? And the capacity build has to go around that immediately. But there are enough projects which are going on.
Chandramoli Matiy
Sure. And the last question is with regard to vcv, considering that the recovery this time seems to be driven by icv, where I think Aisha has a very dominant market share position. How are you positioned in terms of capacity and what is the plan for capacity build up there? And second, in terms of do you need to launch product new products there to maintain the leadership because some of the competitors are trying to enter the segment or increase the competitive intensity.
Vinod Aggarwal
As far as the capacity is concerned, we have now two truck plants. One is in Pitampur and other is in Bhopal. So for the current volumes we are very well industrialized. So there is no concern as far as the capacity is concerned. For the current year but of course next year if the industry continues to grow then of course we might have to increase the capacity in Bhopal and for which we are thinking over it and but that will not be a very major capex so we will take steps in next year. If on peak level some monthly requirement is high then we will take those steps next year.
Chandramoli Matiy
So you might be what 85, 90% utilization now?
Vinod Aggarwal
Yeah. Currently we are producing 10,000 vehicles per month. 10,000 plus. So we are almost at 80 90%.
Chandramoli Matiy
Sure sir. Thanks and all the best.
operator
Thank you. A reminder to all the participants, please limit yourself to two questions. The next question is from the line of Yash Agarwal from Nirmalbank Securities Private Limited. Please go ahead.
Yash Agarwal
Hi, good evening. Thank you for the opportunity. My question is for the BECB bus segment as we have seen that bus volumes have moderated in Q3 and also for year to date accompanied by 110 base decline in market share. Could you elaborate on key factors contributing to this slowdown and steps to stabilize and regain market share?
Vinod Aggarwal
First of all, as far as the bus industry is concerned this year the growth has not been that high as we had experienced in the previous years because the base was very high. So therefore the growth rates have been moderated. And the second, the region of our lower numbers is also due to some lower orders from the institutional sales. Last year we had very large institutional sale order from upsrtc. This year of course we still don’t have very large orders whereas the competition has got larger orders. So therefore our overall numbers are down a little bit.
Chandramoli Matiy
And my second question is on export which has been very strong this year. So could you share insights on key geographies driving this growth and what will be the export Momentum expected for Q4 and beyond?
Vinod Aggarwal
We are right now having very good traction in Middle East. We are now exporting almost 100 plus vehicles there every month, largely buses and LHD trucks. Then of course the numbers are also better for us in Bangladesh and Nepal. Sri Lanka market also has opened up again but there of course still the numbers are very small and of course the numbers in African markets are also respectable. So therefore all this has contributed to our high growth in export numbers and going forward Q4 also is likely to be better as far as exports are concerned.
Yash Agarwal
Okay, and my last question is for the Enfield Electric portfolio. Could you share more color on the launch roadmap, target customer segment and how these products fit in? Well, Enfield product portfolio like flying fee and other.
Kapil Singh
So flying fleet is our endorsed brand of Royal Enfield for the City City plus electric mobility. We have two products which we unveiled. One is called C6 which is a classic style one. Another One is an S6 which is a scrambler version. C6 is almost ready for production. You will see it in the market soon but we will be doing a cautious approach of not going around and then saying here is a product we will build because as a category has to be built and we will build it slowly and steadily that you will see it in next quarter time window.
And S6 will come at the during the course of the year around the EICMA time. That’s the plan as of now.
Yash Agarwal
Okay sir, that’s it from my side and congratulations for Q4 result.
Yash Agarwal
Thank you, thank you.
operator
Thank you ladies and gentlemen. We will take that as a last question for today. I now hand the conference over to the management for closing comments.
B. Govindarajan
Thank you very much for everyone for attending this conference call and see you all soon.
operator
Thank you very much on behalf of HDFC Securities Ltd. That concludes this conference. Thank you all for joining us today and you may now disconnect your lines.