Hi, good evening, good morning, good afternoon to all of you wherever you are in the world. Welcome to Eicher Motors Q4 FY23 post-result investor call. We have with us, senior management of Eicher Motors represented by, Mr. Siddharth Lal, MD and CEO, Eicher Motors Limited, Mr. B. Govindarajan, CEO of Royal Enfield and whole-time director, Eicher Motors Limited. Mr. Vinod Aggarwal will be joining shortly. He's, MD and CEO of Volvo Eicher, joint venture and whole-time director, Eicher Motors Limited, and, Mrs. Vidhya Srinivasan, Group CFO, Eicher Motors Limited. Over to you, Sid.
Hello, everyone, and a very good evening to all of you. Thank you so much for joining at this late hour in India at least, on our call for our Eicher Motors Limited earnings call for the quarter and the year ending March 31, 2023. Overall, the financial year has been absolutely fabulous for Eicher Motors. We made really, really good progress towards our long-term vision, our goals, and have registered an absolutely stellar performance this year. It's been our best ever financial and business performance as it were this year. I'll begin with the highlights, business highlights for Royal Enfield. We registered our best ever sales of more than INR 8 lakh 34,000 motorcycles. 834,000 motorcycles this year. Beating our previous best, which was the pre-pandemic 2018-19 year.
We also took huge strides in our international business front. For the first time we achieved over 100,000 or over INR 1 lakh unit sales in export markets. It's a big inflection point, we believe, because, you know, that's when also in the domestic market we had enormous growth. Of course, there are different challenges, but we have also started our CKD operation in Brazil this year, the previous year, which is an extremely high potential market. Overall, we have 4 CKDs. In addition to Brazil, it's Argentina, Colombia and Thailand, all relatively large to very large potential markets. We also had two outstanding launches last year. Again, the first physical launch after pandemic was the Hunter in Bangkok with global media, which was really, really highly appreciated.
The launch, the motorcycle, the refinement of this roadster style of motorcycle, which is absolutely fit for the city roads in Bangkok and also for longer distances. It went off super well. We had our Super Meteor 650 launch in Jaisalmer in Rajasthan, with a long stretch of ride that we all were on with the global media again. It really proved itself to be the absolute best middleweight cruiser in the world today. That's the kind of reviews that we've gotten also, if you have had a chance to look at those. Both motorcycles are doing extremely well in India and in international markets in their segments. Again, two successes, new product successes behind us in segments that we've not necessarily been in in the past.
Again, after a break of two years, we returned to Goa with our new format of Rider Mania, which we call Motoverse now. We had three outstanding days of sound of motorcycles across Goa, but also entertainment, music, talks, art, shows, all sorts of things that really got the hearts and souls and bodies of our rider community moving. It was extremely well taken. I believe, even though we had absolute record numbers of over 14,000 visitors, I believe this year will be a hell of a lot more based on the success that we had last year. It's been absolutely fantastic. It's also starting to become a bit of a global event with a lot of international participants also coming in.
That's the business highlights on Royal Enfield. We move to VECV and just in time with Vinod also joining us now. Vinod Aggarwal, as you can see, is on screen. We've had a absolutely tremendous year, excellent performance in VECV this year. We had our highest ever sale of Eicher trucks and buses. Over 77,000 units. Record performances in our other business segments is our VE Powertrain, where we sell engines to Volvo Group globally, at Volvo Trucks, where we distribute and sell Volvo Trucks in India, and the engineering components business as well. We had robust profitability, improved profitability through the quarters and improved market share across the board in our light duty, medium duty, heavy-duty and buses and Volvo Truck segment.
Everywhere we made huge strides, market share gains, had a very successful year overall. We also celebrated 15 years of the joint venture with Volvo. Volvo and Eicher. We had a lovely event in our state-of-the-art new manufacturing unit in plant in Bhopal, where the entire executive board or the management team of Volvo Group, all of them came down. They spent time with us in Bhopal and reconfirmed our commitment towards modernization of transport, commercial transportation in India and of working closely together between Volvo and Eicher in the coming years as well. It was really a very good highlight last month in April with our 15th-year anniversary of the joint venture.
Coming to consolidated financials for Q4 and for the full year ended March 31st, 2023, we had five quarters in a row of record revenue, which again, last quarter was record revenue for EML consolidated and our best ever annual revenue. For Q4, we had a revenue of over INR 3,800 crores, up 19%. For the financial year, revenue at INR 14,442 crores is a 40% growth over last year. Our profit and EBITDA have also been growing year-over-year and sequentially, and we registered our highest ever PAT and EBITDA for four quarters in a row and for the financial year. Again, record numbers through. For our EBITDA for Q4 was INR 934 crores, up 23%.
For the full year was INR 3,444 crores, up 59%. PAT was at INR 906 crores, up 48%. PAT at INR 2,009 crores, up 74%. Good absolute profit growth at EML. EBITDA margin for the quarter stood at 24.5% against 23.7%, and for the full year at 23.8% against 21% last year. Again, big growth in profitability as well from previous year. Overall, in the board meeting that we held today, the board of directors of Eicher Motors Limited has declared a final dividend of INR 37 per share for the last year, implying a payout sum of INR 1,012 crores, which is around 35% of our profit after tax.
The dividend per share is the highest ever for EML and is around 76% higher than the previous year. In addition, the board has also approved a cash outlay towards capital expenditure for Royal Enfield business and INR 1,000 crores for the financial year 2023, 2024. This year that we are in already, which includes investment towards EV manufacturing, EV product development, and of course, product development for our internal combustion engine portfolio. Large chunk of it is only for product development in both ICE and EV. That's the overview of Eicher Motors Limited. Now we'll have Vinod Aggarwal talking to us about VECV.
Before that, I'll hand over to Govindar ajan, CEO of Royal Enfield, to give us more detail about the business of Royal Enfield in the last quarter and in the last year. Over to you, Govind.
Thank you, Siddharth. Hi, everyone. Hope you guys are doing well. you know, Royal Enfield has been a spectacular year. Not only we registered the strong performance in the domestic market, as Siddharth was mentioning, we also crossed a very important milestone in our international journey is over 100,000 motorcycles dispatches from India. Let me begin with some of the performance of this quarter and the year. For the Q4, we sold almost about 214,685 motorcycles, which is up by about 18% compared to last year. Our demand is continuing to stay very resilient. It's actually further getting aided by our new motorcycle launches, which we have done, which got an excellent response from our consumers.
Our market share in the domestic market, in the motorcycle segment, especially on the 125 cc and above, it grew to almost 33.5% compared to about 32.9% in the Q4 of financial year 2022. For the full year, the total standalone motorcycle sales at Royal Enfield stood at almost about 8,34,895 motorcycles, registering a growth of almost about 38.4% compared to last year. In the motorcycle market share, we gained almost about 7.2%, which is a record one. We also gained almost about 31.3% market share in more than 125 cc. Every third motorcycle is now the Royal Enfield in India.
Our international markets, the momentum is continuing. We crossed, as Siddharth mentioned, about 100,000 motorcycles mark for the first time. We also registered about 23% growth over the previous year. Despite the macroeconomic backdrops, our retail growth in the international market is ranging between 27%-45% across various regions in the financial year 2023. Our market share in the middleweight segment across the markets has climbed, especially in Americas, about 7%. In fact, is almost about 8.9%, and EMEA is about 8.8%. We further strengthened our footprints in Americas with our 4th CKD plant in Brazil, which is really important for us to be looking at that market. We also have plans to launch the CKD facilities which we have signed up for Bangladesh and Nepal.
At U.K., we are actually implementing direct distribution by ourselves. We have already taken over in this month. We are aggressively working on expanding our reach in the existing and a few newer international markets during these upcoming years. Happy to share with you, Royal Enfield has achieved the fourth strongest brand globally as per the global auto report from the U.K.-based Brand Finance for 2023. Royal Enfield is the only motorcycle brand to feature amongst the top 10 global brands of this. You all know on the product front, we have introduced two new exciting motorcycles, the all new Hunter 350 and the Super Meteor 650. The Hunter 350, which is a stylish, very accessible roadster, which was launched in the month of August in Bangkok, has received excellent response worldwide and has won numerous awards also as well.
It won the Indian Motorcycle of the Year award, IMOTY 2023, India's most prestigious automotive award, among the several others. The Super Meteor we launched this year in January is performing very well. We have excellent response from the markets all over, outside India also. We have a very good booking in Europe, Americas and the APAC region. Our non-motorcycling business is continuing to grow very, very consistently. Our endeavor to deepen rider engagement with their motorcycle has resulted in an outstanding growth in spares, accessories, apparels everywhere. We have witnessed a growth of about 32% year-on-year in this, led by the strong growth, especially in accessories business. On the EV journey, we have been making at a steady progress.
I can say EV journey is and Royal Enfield is at the top gear now. Our intention is to create uniquely differentiated electric motorcycles with strong Royal Enfield DNA. We have commissioned a very capable team who are committing, and we started committing very deep investments in terms of product development and product strategy and in the product testing and development area. Currently we have laid a robust long-term product and technology roadmap on the EV and towards developing supplier ecosystem is what is the focus as of now, which we are doing it. There are a lot of prototypes with testings which are going on in EV. That's why I said it is in the top gear. We are very committed. It's in full blast now.
In addition, you all know we have made a strategic investment of almost EUR 15 million in STARK Future in January 2023. Now both the teams are working well, and they are collaborating very well to learn from each other and looking at what is it the co-creation and the development which we will do and how do we leverage each other's strengths. That's what is the works going on. In conclusion, at Royal Enfield, we had a very great year. I must tell you, we have also even better one which is planned, which we'll see it in time to come. We have a very strong lineup of motorcycles for the year 2024 and a robust plan of growth on the rebalance which we have articulated. Now I will request Mr. Vinod Aggarwal to walk us through the VECV performance and the updates. Over to you, Vinod.
Thank you, Govind, and thank you, Siddharth. Very good evening to all of you. For VECV, last year was a record year in various respects. If you look at our overall sales, last year we closed at 79,623 units, trucks and buses, which was against our earlier peak of 72,969 in 2018-2019. We have grown by 9% as against the earlier peak in 2018-2019. The overall CV industry is still down as compared to the earlier peak. 3.5 ton and above industry, it is down by 15% as compared to the earlier peak of 557,000 units in 2018-2019 to 474,000.
Industry is still lower than the earlier peak, whereas we have grown by 9%. Which means that we have grown in market share in all our product lines. For example, in light and medium duty trucks, five to 18 ton, this year we have market share of 31.5%, and it is consistently improving year after year. Last year, it was 30.2%. In buses, this year, we have market share of 24.8%. Again, it is improving consistently year after year. Last year, it was 21.9%. In heavy-duty trucks, again, it's a very good, steady growth year after year.
Both Eicher and Volvo together, last year we had a market share of 8.3%, which was a year before 7.3%. There has been consistent improvement in market shares all across. We continue on our commitment towards increasing uptime to our customers. We are very advanced in the digitalization services. We are offering 100% connected trucks. Based on that, we are able to offer various types of services like the predictive maintenance or remote diagnostics or. That takes the entire customer satisfaction experience to a new level. Of course, we are continuing to improve on our network. Every year, we are adding a number of new dealers.
Our penetration is improving in the country as a whole, and that is also one of the reason of improvement in the market shares. We also recreated our commitment to the sustainable transport by delivering 40 electric buses to the prestigious city of Chandigarh. These buses are running very, very successfully. We showcased wide range of future-ready solutions, encompassing decarbonization, increasing uptime, and connected solutions at the Auto Expo 2023. We were also ranked number one in the dealer satisfaction survey for the 2nd year in a row. We also won 6 Eicher and Volvo trucks and buses. Six of our products were ranked number one across relevant categories at prestigious Apollo CV Awards.
Now, coming to the overall revenues, last year we closed with the total revenues of INR 18,952 crores, which have grown by 48.9% over previous year revenues of INR 12,724 crores. For quarter four, our revenues were INR 6,200 crores, which are up by 43.9% from last year quarter four of INR 4,307 crores. As far as EBITDA is concerned, for full year, we have EBITDA of INR 1,375 crores, which is at around 7.5%, grown by 92.1% over the previous year EBITDA of INR 716 crores, which was at 5.9%.
For quarter four, we have EBITDA of INR 619 crores, which is at 10.4% as against the previous year quarter four of INR 288 crore at 6.8%. As far as the PAT is concerned, for full year we have PAT of INR 579 crores as against INR 211 crores last year. For quarter four we have PAT of INR 319 crores from INR 99 crores last year. Now of course, I hand it over back to Siddharth for closing remarks.
Thank you, Vinod, and thank you, Govind. Before that, I think, you know, after two really tricky years previously, I think we've had a absolutely stellar performance in EML and VECV last year. It's been a year of consolidation in some way because after all the, you know, all the different forces around the world in terms of, you know, the COVID and supply chain, all of that, it's been a settling year. It's been a year where we've all been able to settle down, get back to full focus as we do and get back to our growth and profitability and development of future for both RE and VECV.
We've had a really solid year, and I'm delighted to say that the combined revenue, actually, if you look at it like that, which we don't in our financials, but if you just to combine EML, which is RE, and VECV together, we have over INR 33,000 crore revenue now, which equates to over $4 billion revenue. Now it's really sort of starting to crank up and become a sizable company. It's not just that. We've really set ourselves up for a really strong base now for the coming years and for the next phase of growth that we have. We see some points of inflection. We see that Royal Enfield has crossed 100,000 or INR 1 lakh units internationally.
We're seeing that the interest, the demand, the virtuous cycle of dealers making good money, of dealers wanting to have Royal Enfield outside of India and then customers, you know, big demand for our bikes which is coming in, we're seeing a point of inflection there. We're seeing a significant point of inflection in VECV with heavy-duty trucks where for years and years we've been hard selling, but now it's really starting to move in its own momentum now, and it's starting to grow. Heavy duty trucks, we all understand, is in revenue terms, is the lion's share of the truck, of the commercial vehicle market.
We've reached a threshold level, I would say, of, you know, a couple of thousand units per month, nearly up to 1,000, 1,500, 2,000, even 3,000 in some months, we've crossed in heavy duties. It's been really strong and we see that inflection coming up. With all of this, we're delighted about our past performance, about how things are going, about how smoothly the company is operating and in the new normal situation where there is a bit more choppiness than there was pre-pandemic. We are able to manage all that because of our extremely focused approach in both Royal Enfield and VECV. We have a tremendously sharp focus and tremendously sharp leadership, and that's what I believe will be our biggest strength in the coming years.
Thank you very much for joining us. Now we can have some questions.
Sure, sir. We can start the Q&A session. First question is from Jinesh Gandhi. Jinesh, you can ask your question.
Maybe we move to next participant.
Am I audible?
Yeah, yeah, Jinesh, please.
Yeah. Hi. Congrats on the great set of numbers. A couple of questions from my side. One is, can you talk about the driver of realizations and gross margins in this quarter for Royal Enfield, the standalone business?
You want to begin?
As far as sales is concerned, I think there's been a combination. As far as we've had ASP growth in the quarter, which is really driven by a higher share of international volumes which has happened. We've also had a bit of pricing impact because we've taken price increases on account of Hunter and Bullet in the past. I think those two factors are really responsible for the increase as far as revenues are concerned. From a margin standpoint, I think there are multiple series of factors which are coming into the picture. We've had raw material savings of approximately about 0.9% quarter-on-quarter.
We've had some, you know, it's really because of various, you know, initiatives that have taken place internally and also some of the commodity tailwinds which are coming through, and that's reflecting in our raw material savings. Apart from that, obviously the pricing is also leading to the gross margin improvement. A little bit international mix improving is also obviously contributing to gross margin, so it's a combination of all those factors.
Got it. Commodity cost tailwinds are largely behind, or you see further savings coming in 1Q, 2Q?
I think, you know, one thing I think we should say is that we are kind of watching. I think, on steel, for example, there's been a bit of price increase, but we have, for example, done a price correction of about 1.5% in May 1st. We're kind of monitoring how the impact is playing out.
Just to add, Jinesh. It's not a, it's not a point of discussion on an everyday basis how the commodity is actually hitting. The super commodity inflation cycle, our understanding is it's not the one which is facing us. There will be blips which we have to manage, because of business.
Got it. Last question on expansion or ramp up of new models, both Hunter and Super Meteor. How are we planning to ramp it up, both in terms of production, as well as the launches in the export markets, where we have not yet launched? For example, Hunter is yet to be launched in LATAM and other markets and Super Meteor beyond Europe. How do we see that?
Yeah. Super Meteor is the first thoroughbred cruiser from Royal Enfield, which is shared with you. We have already dispatched almost 4,000 plus Super Meteor across the globe. What's happening is there's more and more the demand is coming up. The team is also now working on how do we improve the productions. We are on the process. You will see the production ramping up within next weeks to months to come. It'll be constant ramp up increase, which will take place.
Product launches in global markets, mainly Hunter in LATAM, and Super Meteor beyond Europe?
Yeah, yeah. We started launching market by market. Almost most of the market we have introduced. I mean, when we are talking in the last two days even in Australia and all, our team is actually launching the Super Meteor. We have done Hunter launch in USA. Depending upon the availability, depending upon the homologation in hand, we keep launching it. You know, as is a global.
Sorry, sorry, Govind, didn't mean to cut you off. Just to reconfirm that all of our products are global products. They will all have a place in every market, by and large. I mean, there may be a small exception here and there, but certainly, for example, in the case of Hunter, in the case of Super Meteor, they will go to pretty much every single market we have. There's a cadence, as Govind said, because of homologation, because of market situation, because of seasonality in markets, all of that we prioritize some markets over others. Other than that, you're going to see all our products in every market. Over time, you're going to see that happen quicker. I can see the back tone or the background you're coming from is that, "Okay, look, it's been many months.
Why isn't it in globally?" Yes, we understand. We are, in our future products, we are trying to reduce the gap where from, you know, from global launch to availability across the globe, right? We are trying to move that further.
Got it. Thanks and all the best.
Thanks, Jinesh. Next we have question from Chandramouli.
Hi. Can you hear me?
Yes.
Yeah. Thanks for taking my questions and good evening. The press release mentions that the Super Meteor 650 will be launched soon in the APAC and Americas markets. Just trying to understand, sort of based on your international market models, is America a larger opportunity for Super Meteors than Europe, or is that maybe not the right understanding? Also based on sort of initial customer feedback, is the Super Meteor likely to be more of an export market-focused product than domestic for us? Are there any supply chain factors to keep in mind as you ramp up production on this model?
Yes. I'll go from behind which you're talking about, is it only for export? No, it is a global product. And it is also equally being loved by the consumers in India and the booking is going up. Obviously, don't ask me what's the booking number. I'm not going to tell you. But booking is very good even in India. International market, the traction has been very good. As Siddharth was mentioning, we are opening market by market with the ramp up coming up and the homologations which are coming up into this. It's, it's in the, it's in the execution mode. You will see these things which will happen within next week to month come. Everywhere it will be available.
Got it. That's helpful. My second question is on the export markets. It appears that we are around close to a 10% market share on average in the global middle weight market in the previous fiscal. We've made a lot of progress in setting up sort of more exclusive Royal Enfield stores in the recent years. Could you share some color around, you know, what are the incremental market development activities that we are considering in the export markets? Are there any details on the current split of sort of volumes between the exclusive stores and the multi-brand outlets? What percentage of the exclusive stores are company-owned versus third party? Sort of lastly, if you could share just export market revenue for the full year and then non-motorcycles revenue for the full year. Thank you.
Too many questions. Maybe I lost track. Maybe I'll just go. In terms of number of outlets, we are almost having about 1,150 premium retail outlets outside India, which has exclusive stores and also multi-brand outlets. If I have to talk about, over 207 are exclusive stores outside India, I'm just talking about, and almost about 950 is the multi-brand outlet.
Just to add there, none of them are company-owned. These are all third-party stores. All of them.
All third-party stores. What's our focus is that the international market, we have, we almost got the market share in all the markets where we are in the middle weight is anywhere between 8%, 9%, 10% range. That's where we are. The addressable market is very good. It's quite huge. In fact, Siddharth was just explaining, it's as good as about what's there in India now for the middle weight is about one million motorcycles outside India. There is a huge headroom for Royal Enfield to grow. What Royal Enfield have to focus on is getting the right products, and that's what we have done with our Classic 350 on the J platform, then the Hunter 350 which we brought in, and the Super Meteor.
Very recently we have done a refresh on our twins platform motorcycles on Continental GT and Interceptor. All these products are getting accepted very well. We are also working extensively on the community connect because what we understand is delivering the pure motorcycling experience, and that's what we focus on even outside India. In creating a culture of motorcycling is that's what we believe is Royal Enfield. With all the spare parts issues sorted out, with the retail outlets numbers which are going up and in the products, we have a huge headway for us to grow in the international market.
Got it. That's helpful. Just lastly, if you could share the export market revenues and the non-motorcycle revenues for the full year, please?
We'll come back to you on this, Chandan, probably when we are picking up the numbers.
Sure, sure. Sure. Thank you very much. All the best.
Thank you.
Thanks. Next question we have from Kapil Singh. Kapil, please unmute.
Hi. Thanks, sir. Congratulations on a good set of numbers. Firstly, if you could just talk about what you're seeing on the demand outlook across these segments. You know, there was some discussion that we had last time that, you know, on Hunter we are also looking to expand presence across, you know, Tier 2, Tier 3 towns. How's the reach right now? Overall, what are you seeing on the industry?
Okay. Hunter, we'll talk about it. Hunter, when we, when we launched, we started looking at the main markets, A +, B and all. The next focused area which we have been talking about in Hunter is in tier two, tier three cities also. For Royal Enfield last year, in all the areas, rural, urban, everywhere the growth has been very good. Now with the ramp up, which has been almost on the very good situation for Hunter, the booking is also going up. The supply situation has become better. It has eased out. Now the focus is more on even the rural markets. That's on the Hunter. What's the next question which you were asking, Kapil?
On the overall market, what are you seeing? Right. In domestic and exports both.
Exports, there are macro issues which all of you know. There are inflation pressures, energy cost higher and all those things. The mobility solution which is required especially for the two-wheelers hasn't come down. There's no signs which is showing at this stage, it's on a high pressure point. It has to be watched, because nobody can spell that particular situation on a macro level. As far as the domestic market is concerned, I think it is coming back, the overall market. The market, it may not come up to the pre-pandemic level completely, it is coming up. The good sign for Royal Enfield which we are looking at is the premium segment or the premiumization is better and the premium segment is growing. We have grown better than that.
As that segment is growing, and with the outstanding products which we have launched, especially Hunter, which is now getting, reaching into all the rural area and our Super Meteor and our Classic 350, and the new products which we have lined up for the coming year, we see when the market opens up, we will have a very good traction and a good growth for Royal Enfield.
Great. Sir, the second question was on electric vehicles. You know, we have started some initial CapEx there. Could you talk about how do you see the salience of electric vehicles in your segments over the next few years? You know, is it, is it viable as you see things right now, or it will take some time? How much CapEx is going towards electric vehicles? Can we talk about what kind of capacities we are creating there and when we will start launches?
Electric, you know, the transition will take place. It's only the question of at how many years it will take. Initial adoption is not the motorcycles, it's scooters. Over a period of time, the adoption will take place even in the motorcycle segment. Because the cost, the total cost of ownership, if I have to put the battery cost and all the other costs which are there, for a motorcycle of our nature which is there, especially for the leisure motorcycles, it'll be bit tough because ICE will be cheaper in that way. Over a period of time, when the commodities like batteries and all those things, the cost comes down, the TCO will come down, which will become a compulsory reason for the consumer to buy. It may take few years. That's our understanding at this stage.
What is important is even the ICE in the segment where we are, the premium segment, as that is growing and we see at least for a few years that the growth will be continuing. We have to invest both in ICE and in EV, and that's what is the capital outlay which we have talked about. As it mentioned about INR 1,000 crore, which is involving ICE new products and also EV. At this stage of the stage where we are in EV, our focus is more on product development rather than just the capacity enhancement. Capacity enhancement will come at a point of time, and we have done the strategy of at what point of time we have to build the capacity. We have the factory space which are available at our Vallam facility.
We will build up, the line which is required for EV manufacturing also at that place.
Any timelines you can share on the launch? When is it expected?
You know, the timing-wise, I think it is, it's in, out in public. A lot of you people have been saying that 2025, 2026 and all. What we are working on, we have to get a product which is very disruptive, when it comes at a point of time. It can't be we are also there type. Our focus has been what sort of a product, what sort of an experience, what's the take for Royal Enfield when we come out with an electric motorcycle. Our product strategy work and what are all the products and the number of products at what point of time we have to come up. That all has been lined up.
Our focus as of now is all about getting the product right and working with the ecosystem and the suppliers to see that all the capacities are plot and get the motorcycle on. You will see at an appropriate time when we come up. Maybe at an appropriate time we will come back to you and then say, "We are ready now." That's the time we are going to launch.
Okay. Thank you so much. Have a good day.
Thanks.
Yeah. I think I just confirmed the values that you guys were asking for. International revenue is about INR 2,080 crores and non-motorcycles for the year is about INR 2,041 crores.
Thanks. Next question we have from Amyn Pirani.
Okay.
Yes. Hi. Thanks for the opportunity. I just had a follow-up on the export, one. We know that the seasonality of exports is, you know, slightly different from domestic. Especially in the last few months, we've seen a lot of volatility. Now when I look at near-term numbers, you know, March was very strong, but I guess that was because, the Hunter exports, you know, ramped up and then April. When I look at April, is it seasonality or is there some slowdown? Can you give some sense as to what you are seeing at least for the very near term? I think you, we are past the, stocking cycle for the, for the, riding season for the overseas markets, if I'm not wrong.
Some color there would be helpful.
Amyn, our focus always, as we mentioned, we don't look at short term, every week, every month, how things are, right? What we normally look at is for a long term, what is that we have to do for those markets. Our international market ambition is very high because the addressable market is very good and our product is getting accepted very well. The brand is being recognized very well. Everyone starts looking at Royal Enfield products are really gorgeous looking and it exactly what they want. Simple. It has the relevant technology which is there in the market. With all these things, we see there's a huge potential for Royal Enfield to grow. April, what a month. You know, there are issues in some countries. There are port congestions which are there. There are strikes going on in some countries.
One thing which we have to bring it to all of you is, in fact in U.K., we are taking over the distribution and from this month onwards, there are some stocks which has to be adjusted and all those things. These are all the operational metrics, which is what is being there. Riding season is starting now and our retails are becoming better. We have a clear vision of how do we become the leader in the international markets, for which all the activities which are required, that's where is the focus on that.
Thank you. That's helpful. Just one question on financing. What would be the broad, you know, retail penetration for you in India right now, and how do you see that moving?
It's about 55%.
55%, yeah.
There you go.
Yeah, it's about 55% is our penetration. I think it's been, you know, pretty consistent, and I think we do obviously see that over a period of time it will keep ramping up, but I mean, it's been pretty steady for us.
Great. Thank you. I'll come back in the queue. Thanks a lot.
Thanks. Next we have question from Pramod Kumar.
Hello, can you hear me?
Yeah.
Yeah. Hey, hi. Thanks, Govind. Sid, Vinod, great set of numbers. I think I'll first ask the CV question, because there's a lot discussed on RE already. On VECV, Vinod, sir, I think, great performance, and would like to use this opportunity to ask you on the outlook for the CV industry, M&CV industry, particularly for FY 2024. Because there are a lot of concerns about whether the growth is slowing down or whether we are in the last lap of the CV upcycle. If you can share your thoughts, given your decades of experience in the space, how do you look at the M&CV volume growth for this year, sir?
I think there is still a lot of room for further growth because if you look at the industry position, it is still lower than the earlier peak of 2018-2019. First of all, if you look at the overall economy, Indian economy now $3.5 trillion. We are fairly confident that this economy is going to grow year after year. If you go by the government's estimates, they are saying $5 trillion economy in three to five years. If it doesn't happen in three years, five years or maybe it will happen in six years or seven. Therefore, the growth is imminent.
The economy is going to grow. If the infrastructure investments, the way these are going, like this year the allocation is INR 10 lakh crore in the fiscal budget. Next few years it is going to be, I think, $1.5 trillion, say INR 110 lakh thousand crore. Therefore, the CV industry is going to be benefited with all this traction in the economy as well as the infrastructure investment. The second major reason of growth is the replacement market is going to be very, very strong because the old trucks, they are not able to meet the productivity or efficiency requirements of the customers.
Therefore, all the old trucks which are more than five to six years old, which are there with the fleet operators or with the transporters, they would be required to replace because more and more improvement in infrastructure, and also the expectations of customers. We have to meet the speed requirements, we have to meet the timeliness requirements, we have to meet the productivity and the cost requirements. These can only be met by the new trucks. The pent-up replacement demand due to the COVID and real replacement, which is going to happen in a very strong manner, that is going to be there. That is the second major reason of growth happening. The third is, you were asking about the heavy-duty trucks.
Heavy-duty trucks, the earlier peak were 295,000. We are still at 247,000 last year. Heavy duties, they are still lower than the earlier peak. Even though the light and medium duty trucks, they have now reached the earlier peak. As far as the bus market is concerned, we will see a lot of growth coming in the demand from the state transport undertakings because state transport undertakings have got very, very old fleet. There will be huge requirement coming this year itself of the bigger buses from the state transport undertakings. The school segment is becoming very, very strong for the light and medium duty buses or the, you can say up to 11-meter buses.
Therefore, that demand for buses, we will see good growth in the current year. Only right now the stresses in the global markets or the exports out of the country, they are down significantly. They will also improve once the situation improves in the South Asian markets of Bangladesh and Nepal. Mostly the pain is there in Bangladesh and Nepal and Sri Lanka of course. However, the market is good in Middle East and African markets is not that impacted. Of course, there will be good market even in the Southeast Asia like Indonesia or Malaysia or we are also now going to export to Latin American countries. Therefore, I am very, very positive about the CV industry.
We will see good growth at least for next two periods.
Vinod, is it fair that the industry could see double-digit volume growth on the M&CV side this fiscal too, industry side?
I'm expecting that. Yes.
Okay. Thanks a lot for that, sir. Second question is on Royal Enfield, Govind. I think, great performance so far. How should one look at growth for the company or generally in terms of the industry-wide premium segment as you look for, look into the next two to three years, Govind, especially on the domestic side? For us, Hunter has definitely done very, very well in the domestic market probably gonna work very well in international too. What I'm trying to understand is how, when do you expect the H-portfolio X Hunter to make a stronger comeback, like the Classic, the Meteor, the Himalayan? When do you expect that portfolio to start firing for you?
Because you talked about demand recovering on the domestic front at the premium category. Is it fair to assume that we could see a growth on a consistent basis even for all the models except for Hunter as well?
Pramod, that's a very big question which you have asked. See, the overall two-wheeler, even now, at least in India, it hasn't come to that level of a pre-pandemic. It is inching up there. It's slowly coming up. The sentiments are positive. It is slowly coming up. As Vinod was mentioning, the economic growth is very positive. Premiumization in the two-wheeler segment is better. You know, the discretionary spend is also going up. All the signals which are there is the market is going to grow. What we are now looking at is when the market is growing, have we done our basics right, and are we on top of it?
Our brand positioning is strongest, the two-wheeler brand in India with unparalleled heritage. We have premiumization of the market. We are there. All the products which we have, we have the fantastic new products which have been launched, especially Hunter. Now we are going into the rural market also more. We have about 2,100 premium distribution network. India, I think with the product, with the network and the market development activities which we are doing with the economic things which are getting opened up, we feel there is a good potential for us to also to grow. Even now, our market share in the motorcycle is only about 7%-8%, right?
There is always a good potential for us to do that because Royal Enfield looks at actually developing the market rather than looking at only taking a pie out of it. We always believe like that. International, you know, the addressable market, Pramod, is almost about 1 million units. There also we have a market share of only about 8%-9% as of now. All the new products which are global products of Royal Enfield, these are all getting launched one by one. This year you will see the traction in those areas also. We also have a huge potential in the non-motorcycle opportunity, right? We are in accessories, apparels and spare parts is well sorted out. In the international market, as of now, we have to now get on to accessories business and all in a bigger way.
We have the configurator which we launched for our accessories. Even the older motorcycles, if somebody wants to change accessories, they can actually do, configure, see it on the configurator and then order. What we are looking at is we are continue to focus on what is right for the company. When the market opens up, there is a possibility for Royal Enfield to really, really grow in the market share there, Pramod. That's the confidence which we have.
Thanks. next, we have question from Gunjan Patidar.
Hi. Hi. Thanks, Basu, and thanks, team for taking my question. Most of my questions have been answered. I just had two follow-ups. One, I'm just trying to get some clarity on this production which has been sort of lagging for the last two quarters. If I look at the dispatches, they've been, you know, they have been, let's say, to some extent, quite ahead of where the production level is. Is this, you know, is this a supply constraint that we're still facing? Is this, you know, some deliberate inventory adjustment that we are doing? Particularly the production is lower for Meteor 350. I'm just trying to get color on, you know, what's going on, for the last six, seven months on the production side.
Gunjan, I don't think we have any issues in the production, to be honest now. Having said, when you raised it, we'll also go through it. I must tell you, Hunter, when we're looking at a point of time, what should be the capacity which we have to build, we built a particular capacity to a fantastic situation to be in, more than what we have invested and than what we thought. The Hunter has started doing very well. We immediately started looking at a ramp up. Hunter ramp up is almost done. The second new product is similarly Super Meteor. That also has come back as a positive thing to us is that it is, it's a good number. The booking is going up. International market, it is doing very well.
In the month of April, we had OBD transition. We have to be careful about the inventory. To that extent, we also did some adjustment in the overall inventory. Otherwise, production is not a constraint. Model to model, when the ramp-up is taking place, maybe it'll take some weeks and months, but it's all in the roll only, Gunjan. We don't need to worry about that.
I should read mostly this as a transition to OBD, that some level of inventory adjustment has played out in the last couple of months.
In the domestic market, yes.
Yes. Okay. The second, a little bit, on the non-motorcycle business. Now, if I look at this has gotten to about 15% of our, you know, close to 14%, 15% of our revenues. Last year, of course, saw a big jump, motorcycle revenues last year were lower. In a normalized year like FY 20 23, we are at about 14%, which is quite a good number. I'm just trying to figure out how should we now think about the growth in this business. Does the share of revenues continue to inch up further? Should we think this growing in line with the, you know, the bike business? If you can just give, share more on, you know, what's really been driving this growth.
I mean, spares is something that we all understand, but maybe on the, the other parts, on the motorcycle.
Yeah. Maybe I'll just give you some color onto this. You know, our motorcycling accessories from nowhere, we are in a very good state now. We are adding more SKUs. You know, not just because we have to add SKUs and get business. Why we do this is it's all about how do we get the consumer to enjoy the comfort. Some SKUs are on comfort, some SKUs are on the style, some SKUs are on safety, some SKUs are for the experience, if he has to go for a touring or something like that. What we are looking at is in every product, what are all the SKUs which we can add in the accessories business which gives them the experience which the consumer wants.
There is a lot of work which is happening in building the SKU for the GMA portfolio. That itself will bring in more revenue into this. We also brought in the configurator, Gunjan, in for the accessories, because in our purchase cycle, when the new motorcycles are being purchased, during that time, they can go through the Make It Yours platform on our website. That's where they normally buy. That's where majority of the GMA purchase also takes place. We also found for the older model cycles which people want, so we brought in a configurator which we are extending. There is a traction which is coming up. In the apparel, we are once again looking at our riding gear range, improvement, collaborations with leading brands like Alpinestars, TCX and all.
It's all about what sort of an experience which we will give in through this product, wherein the consumer will see, "Wow, I have a really a nice product from Royal Enfield which we should actually buy." That's how. It's a business which has to view and revolve around the motorcycling, and that's where the focus is also, Gunjan.
Okay, got it. Sorry, just last question, if I can pitch in here, is on the Bullet. Bullet still stays on the old platform, right? Now the OBD transition has happened. My guess is that, you know, it is compliant under the new norms. If you can give us some color as to when this moves to the new platform, anything, any timelines you can share.
Bullet UCE as of now it is available and it is going and at some point of time, Gunjan, we will do the transition. The way we have done the transition, on the Classic 350 seamlessly, which you yourselves have asked, is there any older inventory which is left out? We are good in that transition, so we will do the transition smoothly.
Okay. Got it. Thank you so much.
Thanks. Next we have question from Raghunandan.
Thank you for the opportunity and congratulations on good set of numbers. To BGR, sir. Sir, for Super Meteor in domestic market, out of the order bookings that have been received, how would be the customer mix? Trying to understand what would be the share of existing RE 350cc owners who would be upgrading to the 650cc Meteor. Trying to understand whether this is being seen as a credible upgrade by existing owners.
Look, our Super Meteor is a thoroughbred cruiser and, as of now we have dispatched almost about 4,000 plus units across the globe. If you have to look at, we have Meteor 350 and we also have Super Meteor 650, right? Those who enjoy an easy cruising, which gets on to that long distance also and cruising also enjoys, it's about the Meteor 350. The 650 Super Meteor is, yes, it is also for the people who enjoy long distance ride. That's also an easy cruising, gorgeous looking motorcycle. It'll take some time for people also to understand. Especially when the road development activity takes place in India, I tend to become very happy about it because that's where the Super Meteor will actually find a space.
More and more, more and more new roads which comes up and people enjoy long distance riding, Super Meteor is an exact product because it's so simple to handle. On the upgrade cycle, whether the 650cc will people will directly move there because it's, you know, Continental GT is the people who love that Continental GT is one set of consumers. They enjoy the style, they enjoy the customization which can be done on that. Somebody will like the Interceptor 650, which is a roadster type. That actually caters to the set of consumers who want an experience. Super Meteor is for a long distance ride, so that addresses a different set of consumers. It depends on what the consumer wants.
We have all the set of products which are available, and it actually answers to the needs of those consumers. it won't be a direct replacement from one-to-one type.
Thank you, sir. My second question on the network expansion in domestic market, how do you see the target for the number of outlets? I mean, mass market two-wheeler players have notably higher number of outlets compared to Royal Enfield. Even car companies like Maruti have many more outlets than us. On an annual basis, what kind of network addition would you expect?
As of now, Raghu, we are almost about 2,100 premium retail outlets across India, which has a mix of studio stores and the dealership outlets. You know, what is more important to look at is the market is also growing. Some area where at a point of time the Autocluster which had been very good, so probably would have been there. We also gone in for, yeah, stores there. In some areas when the Autocluster is coming up, at that area we were not present. Now the focus to the team is actually to look at, because we went in for a particular expansion, now what we have to look at is, you know, it is always proliferate, consolidate, and proliferate. That's how we should actually look at any of these strategies.
We should not blindly proliferate, because we are very conscious of the dealer profitability and we give utmost importance for every outlet's profitability for the dealers. To that extent, our focus as of now is optimal reach is what is required. If we have to increase numbers in the area where the AutoClusters are coming up, we will go there. In the area where the AutoClusters are not okay, we will refine that area because we have different formats, and we will actually adopt that format. If I have to tell you in one sentence now, it's all about optimizing the entire retail network.
Thank you, sir. That's very helpful. That's all from my side. Have a good day.
Thanks all. Due to time constraints, this was the last question. I'd like to hand over to Sid for his closing comments. Over to you, Sid.
Thank you all so much for joining us so late in the evening in India at least. Yeah, we're absolutely delighted about, like I said, our performance last year. I think it was absolutely fabulous. We've had a good start into this year, and we've lots of exciting things, both on the RE side, on the VECV side, new products, new initiatives, and of course, a lot of work being done on the EV journey as well. Lots of interesting things in EML and in VECV. Thank you very much once again for joining us, and look forward to seeing you in next quarter. Bye-bye.
Thanks. I can see many follow-up questions or a few questions unanswered, so I'd request all of you to reach out to the IR team for all your queries. Thanks. That's all from us.
Thank you.
Thank you.
Thanks.