Tag: Royal Enfield

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SEBI Bans Futures Trading For Seven Commodities – Top Indian Market News

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SEBI Bans Futures Trading In Seven Commodities

The Securities and Exchange Board of India (SEBI) has banned futures trading on seven commodities. The commodities are paddy (non-basmati), wheat, chana, mustard seeds and their derivatives, soya bean, crude palm oil, and moong. The move comes in the wake of the opposition that the incumbent government is facing in the wake of the country’s rising inflation rates. The food inflation in India has gone up from 0.85% in the previous month to 1.87%. 

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Shriram Properties Shares List at 24% Discount, Manage To Recover

Real estate developer Shriram Properties got listed today at 20% lower than its issue price of Rs 94. Shriram Properties’ issue price was Rs 118. The share price recovered, touching Rs 102-Rs 103 and closing at Rs 98. Shriram Properties posted a loss of Rs 60.03 crore in the six months ended September 2021. In FY21, the company’s loss narrowed to Rs 68.17 crore from Rs 86.39 crore a year ago. The company’s revenue decreased to Rs 431.5 crore from Rs 571.96 crore during the same period.

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Axis Bank to Raise Rs 5,000 Crore Using Bonds

Axis Bank will raise up to Rs 3,500 crore by issuing bonds. The board of directors had recently voted to allow the bank to borrow up to Rs 35,000 crores using debt instruments, perpetual debt instruments, AT-1 bonds, infrastructure bonds, Tier II capital bonds, etc. “We now wish to inform you that the Bank proposes to raise funds by issuing Senior Unsecured Taxable Redeemable Non- Convertible Debentures (Series – 6) of Rs.10 lakh each for cash at par with a base issue size of Rs 2,000 crore and Greenshoe option to retain oversubscription of Rs. 3,000 Crore thereby aggregating up to Rs. 5,000 crore”, said Axis Bank in a regulatory filing. 

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Supriya Lifescience IPO Oversubscribed 71x On Final Day

On its final day, Supriya Lifescience IPO has oversubscribed nearly 71 times. The public issue subscribed 55.76 times in the retail category, 31.83 times in the Qualified Institutional Buyers (QIB) category, and 161.22 times in the Non-Institutional Investor (NII) category. The Basis of Allotment would be decided on Dec 23, 2021. The shares will tentatively list on Dec 28, 2021.

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Royal Enfield Recalls 26,300 Units Of Classic 350 Due To Potential Brake Issue

Eicher Motors-owned Royal Enfield has recalled nearly 26,300 units of its 2021 variant of Classic 350 motorcycles citing a potential issue with the brakes. The company said in an official statement that a higher braking load applied on the rear brake pedal can potentially damage the reaction bracket. Local dealerships and service stations may call consumers whose Vehicle Identification Number (VIN) falls within September 1 to December 5, 2021. Consumers can check out the website or reach out to the nearest workshop. 

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Vedanta Acquires Nicoment, Becomes Only Nickel Producer In India

Vedanta Ltd has acquired Goa-based Nicoment, a leading nickel, and cobalt producer, making it the sole Nickel producer in India.  Currently, India imports 100% of its nickel requirement from abroad. Nicolet has a capacity to produce 7.5 tonnes per annum of nickel and cobalt. With an ambitious plan in the place, Vedanta plans to meet 50% of India’s Nickel requirements.

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Equitas Small Finance Bank Becomes banking partner for Maharashtra Govt.

Equitas Small Finance Bank announced on Monday that it is now empanelled as the banking partner for the Government of Maharashtra. The move will enable Equitas to open salary accounts for all existing employees and pension accounts for pensioners for the Government of Maharashtra. The other three banks assigned with the role of disbursing salaries are Bandhan Bank, Karur Vysya Bank, and The South Indian Bank.

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ITI Limited receives ₹433 cr worth order from Tamil Nadu Govt.

Indian Telephone Industries Limited (ITI) has received an order from TANFINET (Tamil Nadu Fibrenet Corporation Limited) (A Govt. of Tamil Nadu Undertaking) regarding BharatNet Phase-II. The contract would amount to Rs 433 crore. Under the project, ITI will be covering 10 districts, 109 blocks, 3103 Gram Panchayats, 845 Revenue villages across Tamil Nadu, providing a minimum of 1 Gbps bandwidth service.

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Wipro to acquire cybersecurity firm Edgile for $230 million

Wipro Limited has decided to acquire Texas-based headquartered Edgile for a consideration of $230 million. Edgile is a cybersecurity consulting provider that focuses on risk and compliance, information and cloud security, and digital identity. Together, Wipro and Edgile will develop Wipro CyberTransform, an integrated suite that will help enterprises enhance boardroom governance of cybersecurity risk, invest in robust cyber strategies, and reap the value of practical security in action.

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India’s Manufacturing PMI Rises to 57.6 in November – Top Indian Market News

India’s manufacturing PMI rises to 57.6 in November 

India’s manufacturing activity expanded for the fifth straight month in November. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 57.6 in November, compared to 55.9 in October. Factory orders rose at the fastest pace since February. Strong demand led to higher production volumes, and output rose at the fastest rate in nine months. PMI is a month-on-month calculation, and a value above 50 represents an expansion when compared to the previous month.   

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Auto sales data for November 2021: Highlights  

Maruti Suzuki India posted a 0.61% month-on-month (MoM) increase in total sales to 1,39,184 units in November 2021. The shortage of electronic components continued to affect production during the month. Sales from its utility vehicle segment fell 9.25% MoM to 24,574 units. Exports stood at 21,393 units, an increase of 0.3% MoM.

Tata Motors Ltd registered a 12.22% MoM decline in passenger vehicle sales to 29,778 units in November. The automaker’s commercial vehicle sales fell 4.43% MoM to 32,245 units. Overall domestic sales declined 12.18% MoM to 58,073 units.   

Mahindra & Mahindra’s auto segment posted total sales of 40,102 units in November, a decline of 4.3% over October. M&M’s farm equipment segment posted a 41% fall in sales to 27,681 units. 

Bajaj Auto Ltd posted a 13.7% MoM decline in total sales to 3,79,276 units. Meanwhile, Escorts posted a 47.3% MoM fall in tractor sales to 7,116 units in November.  

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Tata Power secures India’s largest solar and battery project worth Rs 945 crore

Tata Power Solar Systems Ltd (TPSSL) has secured a project from Solar Energy Corporation of India (SECI) to build a 100 megawatt (MW) EPC solar project, along with a 120 MWh utility-scale Battery Energy Storage System. The total contract value of the project is approximately Rs 945 crore. The project will be completed within 18 months. TPSSL is a wholly-owned subsidiary of Tata Power Company Ltd.  

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Royal Enfield partners with Belstaff for exclusive range of apparel

Royal Enfield, a subsidiary of Eicher Motors Ltd, has partnered with British brand Belstaff to market an exclusive range of apparel. With this collaboration, Royal Enfield aims to write a new chapter in the brand history that celebrates the spirit of riding. The limited-edition Belstaff Capsule collection launches today in India and will be available exclusively on the company’s online store and dealerships.

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Zen Tech reports fire accident at its demonstration center

Zen Technologies Ltd announced that there was a fire accident around 10:00 PM (IST) on November 30 night at its demonstration center located at Maheshwaram Hardware Park in Telangana. There were no casualties. The facility is insured, and the financial damage is currently being accessed. Operations are expected to resume within a couple of days, and no impact is expected on any ongoing projects.

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NCLAT rejects Kotak Mahindra Bank’s plea to set aside insolvency proceedings against MSEL

The National Company Law Appellate Tribunal (NCLAT) has dismissed a petition filed by Kotak Mahindra Bank along with a director of debt-ridden McNally Sayaji Engineering Ltd (MSEL) to set aside insolvency proceedings against MSEL. On February 11, 2021, the Kolkata bench of the National Company Law Tribunal (NCLT) admitted a plea by ICICI Bank and directed to initiate insolvency proceedings against MSEL.

Kotak Mahindra Bank had contended that it had advanced loans to MSEL, and NCLT has failed to appreciate that more than 50% of members of the lenders’ consortium had opposed initiation of the corporate insolvency resolution process (CIRP), as they were considering a restructuring of loan outside the IBC.

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Sapphire Foods expects to double store count in next 3-4 years

Sapphire Foods India Ltd said it expects to turn profit after tax (PAT) positive in the third quarter (Q3 FY22) and double its store count in the next 3-4 years. The company’s CEO, in a press statement to mark the 500th store opening, said Sapphire Foods has seen a healthy recovery in dine-in sales alongside a continued acceleration in delivery sales.  The positive metrics translated into positive same-store sales growth in both October and November 2021 compared to the pre-Covid calendar. 

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Biocon enters Dow Jones Sustainability Index in Emerging Markets category

Biocon Ltd has been selected for the Dow Jones Sustainability Index (DJSI) in the Emerging Markets (EM) category for its Environmental, Social, and Governance (ESG) practices. It is among the top 15 companies from India, and one of the 12 companies from the pharmaceuticals, biotechnology, and life sciences sectors to be featured in the index for 2021.

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Gross GST collection in November crosses Rs 1.31 lakh crore

The gross Goods & Services Tax (GST) revenue collected in November 2021 was Rs 1,31,526 crore, the second-highest ever since the introduction of GST. The revenues for November are 25% higher than the GST revenues in the same month last year. The Finance Ministry said that the recent trend of high GST revenues has been a result of various policy and administrative measures that have been taken in the past to improve compliance.

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SBI Q2 Net Profit Rises 67% – Top Indian Market News

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SBI Q2 Results: Net profit rises 67% YoY to Rs 7,626 crore

State Bank of India (SBI) reported a 67% YoY increase in net profit to Rs 7,626.5 crore for the quarter ended September (Q2 FY22). Net profit increased 17% compared to the previous quarter. Its net interest income (NII) rose 10.6% YoY to Rs 31,184 crore during the same period. The gross non-performing assets ratio (GNPA) stood at 4.90% in Q2 FY22, compared to 5.32% in Q1 FY22. Provisions against bad loans stood at Rs 2,699 crore in Q2, down 52% YoY.

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India’s services PMI grows at the fastest pace in over a decade in October

India’s services sector activity expanded at the strongest pace in ten-and-a-half years in October. The IHS Markit India Services Purchasing Managers’ Index (PMI) stood at 58.4 in October, compared to 55.2 in September. Companies indicated that a notable pick-up in new business led to the fastest expansion in output in over a decade, and as a result, more jobs were created. However, business confidence remained subdued due to growing inflationary concerns. PMI is a month-on-month calculation, and a value above 50 represents an expansion when compared to the previous month. 

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Infosys collaborates with Shell to Market Shell Inventory Optimizer Solution

Tech-giant Infosys has announced a collaboration with Shell Global Solutions International B.V. (Shell) as the commercialization partner of the “Shell Inventory Optimizer” solution targeted towards energy companies. The “Shell Inventory Optimizer” uses Artificial Intelligence to optimize warehouse inventory levels based on historical consumption. This will allow energy companies to improve demand planning, reduce time and labour, and bring down cost of operation.

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Zee Ent. To Announce Q2 Results on Nov 27 Amidst Shareholder Turmoil

Zee Entertainment has announced November 27, 2021, as the date for a board meeting to announce quarterly results (Q2). This comes after the company had cancelled its results meet on October 27, 2021, citing a lack of quorum. ZEEL’s single-largest shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC who hold 17.88% stake in the company jointly have been pressing for an extraordinary general meeting(EGM) for the removal of its Managing Director Punit Goenka, besides opposing Zee’s proposed merger deal with Pictures Network India (SPNI). Two of Zee’s independent board members Manish Chokhani and Ashok Kurien have already resigned amidst certain allegations. The two major shareholders and Zee have locked horns with Invesco and OFI Global approaching the Mumbai Bench of the National Company Law Tribunal (NCLT) whereas Zee has approached the Bombay High Court leveling allegations against each other resulting in an ugly public spat. 

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Vodafone Idea: Co Partners With Nokia India For 5G Trials

Vodafone-Idea(VI) and Nokia have announced their partnership to test 5G using ‘E-Bands’ in areas where fiber is challenging to deploy. The two claimed a speed of 9.85 Gbps while testing the 5G networkings. “We are delighted to partner with Vi in trials to deliver 5G services by connecting small cells & macrocells with fiber-like speed through E-Band, in areas where fiber is challenging to deploy”, said Nokia in a tweet. 

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Hindalco Industries to acquire Polycab’s 100% stake in Ryker

Hindalco, the Aditya Birla Group’s flagship metal company has announced the acquisition of a 100% stake in Ryker Base Pvt. Ltd., a wholly-owned subsidiary of Polycab Industries for an enterprise value of Rs 323 crore. Ryker owns a 225,000-ton plant to manufacture cast and rolled copper wire rods. On the other hand, Hindalco owns the world’s largest single-location custom copper smelters at Dahej in Gujarat, with a capacity of 345,000 tons.

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Adani Power Get NCLT Nod To Acquire Essar’s 1,200 MW Mahajan Project 

Adani Power got approval from the National Company Law Tribunal to acquire Essar Power’s 1,200 MW thermal power project in Mahan, Madhya Pradesh. The Principal Bench of NCLT at New Delhi approved Adani Power’s resolution plan to acquire EPMPL (Essar Power M P Ltd) which is currently undergoing bankruptcy proceedings.

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ABFRL Q2 Results: Consolidated Revenue Doubles!

Aditya Birla Fashion and Retail Limited (ABFRL) reported a net profit of Rs 5 crore this quarter against a net loss of Rs 188 crore last year in the same quarter. The consolidated revenue doubled YoY to Rs. 2054 crore from Rs 1028 crore in the same period. The company’s overall business recovered to 90% of pre-COVID levels where the Branded Business recovered to over ~95% of normalized level and Pantaloons to ~73% of pre-COVID levels. Additionally, the E-commerce business grew by 74% over last year. The company added 160+ stores across businesses during the quarter.


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Eicher Motors Q2 Results: Profit After Tax Grows 9%

Eicher Motors reported a net profit of Rs 373 crore, growing at 9% YoY and 44% QoQ. The consolidated revenue of the company stood at Rs 2,250 crore, up 5.4% from the same quarter of the previous financial year. Royal Enfield sold 123,515 motorcycles during the quarter, a decline of 17.2% from 149,120 motorcycles sold over the same period in FY 2020-21. Royal Enfield ended the quarter with the best ever performance in international markets for the second successive quarter with total exports at 17,922 units, more than 132% increase over 7,714 in the same period last year. VE Commercial Vehicles, a joint venture between Volvo and Eicher reported a profit of Rs 9 crore against a loss of Rs 3.85 crore in the same quarter last financial year. 

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Editorial

Royal Enfield – Eicher Motors’ Golden Baby

Have you ever desired to travel cross-country in a Royal Enfield? Each model of RE has a unique and aspirational value attached to it. The Royal Enfield Classic, Standard, and Himalayan have established themselves as benchmarks in the motorcycle industry. The company holds more than 90% market share among motorcycles that have engine displacement within 250-750cc. 

In this article, we shall analyse how well the motorcycle brand is growing under its parent company. How does it compete with other cafe racer brands across the globe?

Royal Enfield – A Brief Profile

RE started its operations in England at the end of the 19th century. In 1932, the company introduced the evergreen model “Bullet” at a motorcycle show in London. It received an order from the Indian Army in 1952 for 800 350cc Bullets. The initial success in India made the foreign company partner with Madras Motors to form Enfield India. Eventually, they introduced Continental GT and the Interceptor, which hit good sales volumes. Towards the end of the 90s, the automaker was in serious financial trouble. Moreover, the parent company in London had already closed its operations in 1967. 

Around the same period, a family-run business in India was finding it difficult to find its momentum. They first tried importing trucks to India back in 1948. This was followed by a partnership with Mitsubishi for manufacturing commercial vehicles (CV). All these businesses were not showing exponential growth. They were unable to attain a significant market share in the CV segment. Thus, the company made a bold decision in 1994 to acquire the financially wrecked Enfield India. That saviour is the current parent company of the two-wheeler manufacturer— Eicher Motors Ltd. 

Eicher saw a huge market for two-wheelers in India. It divested other businesses and started to concentrate on the newly acquired vertical. The introduction of the RE Classic was a great success in India, followed by the release of Himalayan in FY17. The company also relaunched the 650cc twins (Continental GT, Interceptor) and Meteor 350 in FY21. There was also an uplift of the Classic 350 recently. 

The main trump card of RE models is that they are affordable when compared to similar segment models. Let us take an example of Continental GT, which is tagged at a starting price of Rs 3 lakh. Similar cafe racer models such as the Honda CB650r start at Rs 7.7 lakh, while the Suzuki SV650 starts at Rs 7.5 lakh. RE’s affordability factor has led to the growth of a strong customer base in developing markets like Latin America and several countries in Southeast Asia. 

Global Presence

Royal Enfield started its North America division in 2015, followed by a research and development centre (R&D) in the United Kingdom in 2017. The two-wheeler manufacturer currently has 140 stores beyond the borders of India. In developing markets in the Asia-Pacific region, Enfield has 48 exclusive stores, with Thailand leading from the front. In Latin America, RE holds a significant share in the markets of Argentina, Brazil, and Colombia.

Domestic Sales

In the financial year 2015-16 (FY16), the automaker recorded total domestic sales of 4,98,791 units. It grew to 8,05,273 units in FY19, at a CAGR of 17.2%. In FY20, the manufacturer recorded a sharp decline in sales. Total sales stood at 5,73,728 units at the end of FY21. This can be attributed to the Covid-19 pandemic and the lockdowns imposed in various parts of the country.

Interestingly, 91% of the total sales are derived from the sale of 350cc models. The company has a 27% market share in the above 125cc segment as well. Royal Enfield has a 94% market share in the 250-750cc mid-size motorcycle segment.

Profitability

By analyzing the financial reports of Eicher Motors, we see that RE’s total revenue from operations stood at Rs 8,619 crore in FY21, which has grown at a CAGR of 5.2% from Rs 7,038 crore in FY17. The decrease in sales of two-wheelers has resulted in negative growth in revenue as well.

Now, let us analyze the profitability of the brand with other major two-wheeler manufacturers in India. 

Return on Equity (ROE) is a financial ratio that measures the company’s efficiency to generate profits with respect to shareholders’ equity. In FY21, Royal Enfield reported an ROE of 14%, which means that for every Rs 100 invested in the company, it can generate Rs 14 as profit. 

Here, we can see that all automakers have been facing serious issues even before the onset of the Covid-19 pandemic. Royal Enfield’s ROE has almost halved in 5 years. 

Eicher – A Consolidated Profile

As mentioned earlier, Eicher divested their operations in other business verticals like tractors and started to concentrate on two main branches— Royal Enfield and a commercial vehicle joint venture with Volvo Group (Volvo-Eicher Commercial Vehicle or VECV).

VECV primarily concentrates on Light & Medium Duty (LMD) trucks, buses. In 2020, VECV acquired Volvo Buses India (VBI). The automaker produced 41,268 CVs in FY21. In the LMD segment across India, the company enjoys a market share of 30%.

The Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) margin of RE’s verticals are shown below: 

We can see that Eicher’s commercial vehicle (CV) vertical is a low-margin business compared to the two-wheeler vertical. Royal Enfield was able to retain 21% of total revenue as income, while the figure stood at 7% for the CV segment. It is interesting to note that both Enfield and the CV vertical generated revenue of around Rs 8,700 crore in FY21, in which RE retained higher profits.

Conclusion

The increase in the total working population in India, along with high disposable income and decreasing interest rates on vehicle loans, has fueled Royal Enfield’s sales. As per rumours, Hunter 350, Roadster 650, and Scram are some of the company’s upcoming models. The arrival of the facelifted Classic 350 shows that Enfield is updating their models at regular intervals, which will help improve sales. RE is constantly working towards establishing a strong global presence as well. The company has been able to generate an aspirational value for its brand in countries such as Thailand, Argentina, Brazil, and Columbia. However, there is heavy competition from international players such as Honda and Suzuki. The slowdown in the global automobile sector is also weighing down on the company.

The shares of Eicher Motors have rallied by ~29.7% over the past year. Currently, it is trading at Rs 2,852, 6% below its 52-week high. 

Let us look forward to seeing how Royal Enfield implements its strategic plans. What are your thoughts about the company? Let us know in the comments section of the marketfeed app.