Royal Enfield to invest Rs. 500 cr in Chennai plant.

Royal Enfield, which makes the hugely popular Enfield Bullet brand of motorcyces, will invest about Rs. 500 crore in its Chennai plant to develop new products and increase capacity at the facility.

Siddhartha Lal, managing director & CEO, Eicher Motors Ltd., said that the company was mkaing 30,000 units a month at end of 2014, a number the company now wants to ratchet up to 50,000 by the end of this calendar year.

The company has reported 44.5% volume growth during the first quarter (the company follows a calendar year for financial reporting) at 92,845 units as compared to 64,268 units, a year ago. Exports grew 62% to 2,342 units from 1,450 units a year ago.

Lal said Eicher is developing new platforms on which it would develop multiple products over the next three years. 'Our focus will be between 250 cc and 750 cc (bikes),' he said, adding that the company is gearing up for a big new launch next year. 'From next year onwards we will launch one big product every year for a few years.'

The record number of units produced in the March quarter has resulted in a significant increase in EBIT at Rs. 232 crore in Q1 2015 as compared to Rs. 136 crores in Q1 2014. Eicher Motors has been able to extract significant operating leverage in Q1 2015 and recorded its best ever operating margin (EBIT %) at 24.1%.


BS