GICS Industry: Machinery l Sub Industry: Construction & Farm Machinery l Website: www.eicherworld.

com

Eicher Motors Ltd

Key Stock Indicators

NSE Ticker: EICHERMOT CMP (as on 28 Feb 2011—Rs/share): 1059.15 Shares outstanding (mn): 26.9
Bloomberg Ticker: EIM: IN 52-week range up to 28 Feb 2011 (Rs)(H/L): 1447.85/600.00 Free Float (%): 44.7
Face value / Share: 10.0 Market Cap as on 28 Feb 2011 (Rs mn): 28,531 Average daily volumes (12 months): 53,993
Div. Yield (%): 1.0 Enterprise Value as on 28 Feb 2011 (Rs mn): 16,974 Beta (2 year): 0.8
Div. Yield (%): 0.0

Eicher Motors Ltd (Eicher), part of Eicher group has wide interests in automotive business. Eicher
manufactures Trucks, Buses, Motorcycles, Gears, commercial vehicles and automotive Key Financial Indicators
components. It also provides customized engineering solutions. It has 4 manufacturing facilities Dec-08 Dec-09 Dec-10
located at Thiruvottiyur (Chennai), Thane (Maharashtra), Dhar (Madhya Pradesh) and Gurgaon
(Haryana). The company’s registered office is located at New Delhi. Revenue (Rs mn) 17,314.6 29,650.1 44,206.4
EBITDA ma rgins (%) 0.7 5.8 8.6
KEY HIGHLIGHTS PAT (Rs mn) 672.9 1,294.9 3,068.5
PAT ma rgi ns (%) 3.9 4.4 6.9
New project of medium duty engine (MDEP)
VE Commercial Vehicle Limited (VECV) a subsidiary of Eicher has invested Rs.2.8 bn in its Pithampur Gea ring (x) 0.1 0.1 -
plant for the production and final assembly of the Volvo group’s new global medium-duty engine EPS (Rs /s ha re) 31.9 102.3 113.9
platform. It will be possible to locate most of its production of medium-duty engines at VECV’s PE (x) 7.4 6.4 9.3
plant in Pithampur. The investment in Pithampur will result in an annual production capacity of an
additional 85,000 engines. The facility in Pithampur will also conduct final assembly of engines for P/BV (x) 0.4 0.5 1.5
India and all of Volvo Group’s global markets with Euro 3 and Euro 4 emission requirements. RoCE (%) 7.8 11.4 22.7
RoE (%) 8.9 8.0 17.4
Doubling capacity in next 5 years
EV/EBITDA (x) -34.1 -1.3 4.5
Eicher is planning to expand its capacity for trucks and buses to 100,000 units per annum from
n.m.: Not meaningful
current 48,000 units over the next five years. The company will invest about Rs 5 billion in the next
three years (2013) for the capacity expansion at its Madhya Pradesh plant. The company is also
looking to set up a new plant to manufacture its Royal Enfield bikes in CY11. Shareholding (As on December 31, 2010)
DII Others
Entry into new markets
FII 13% 22%
Eicher has continuously and consistently enhanced its presence in the international market through
successful collaboration with top global companies with required standards. The Company has 10%
entered with stringent evaporative emission standards (EVAP) in California USA and is also looking
to expand to new markets in South Africa, Taiwan, Paraguay and Peru in CY11. In CY10 Eicher
introduced chrome version of Classic and Bullet 500 at the New York show and these version will be
marketed in CY11. Eicher has presence in more than 40 countries across the world. During CY10,
exports contributed ~7% to the total revenues.

KEY RISKS
• Increase in raw material prices of iron and steel, aluminium, forgings etc. Promoter
• Loss of customer satisfaction and brand image due to quality issues 55%

• Cyclicality of the industry and intense competition from other players Indexed price chart
• Changes in interest rates (index) ('000)
250 1400
Stock Performances vis-à-vis market 200
1200
1000
Returns (%)
150 800
YTD 1-m 3-m 12-m 600
100
EICHERMOT -15 1 -8 68 400
50
NIFTY -13 -3 -9 6 200
0 0
Apr-10

Jun-10
Jul-10

Aug-10

Sep-10
Oct-10

Nov-10
Dec-10

Feb-11
Mar-10

May-10

Jan-11

Note:
1) YTD returns are since Jan 3, 2011 to Feb 28, 2011.
2) 1-m, 3-m and 12-m returns are up to Feb 28, 2011.
Volumes (RHS) EICHERMOT NIFTY

CRISIL COMPANY REPORT | 1

 Eicher Motors Ltd
BACKGROUND

Eicher was incorporated in the year 1982 and got converted into a public limited company in Sept 2004. Eicher was the first Indian company to make India's very first
tractor. Eicher is engaged in the business of automobile products and related components. The company's product range includes commercial vehicles (Eicher and Volvo
trucks), motorcycles and components, including gears and engineering solutions.

The company operates in the leisure cruiser segment in motorcycles with engine capacity of 350 cubic centimeters (cc) and above. Eicher has also invested in the potential
growth areas of management consultancy services, customised engineering solutions and city map & travel guides. Eicher has presence in more than 40 countries across
the world. Eicher’s subsidiaries include VE Commercial Vehicles Limited, Eicher Engineering Solutions Inc., Hoff Automotive Design Company and Hoff Technology Service
Company.

COMPETITIVE POSITION

Peer Comparison

Eicher Motors Tata Motors Maruti Suzuki Mahindra & Ashok

Ltd Ltd. India Ltd. Mahindra Ltd. Leyland Ltd.
Dec-10 Mar-10 Mar-10 Mar-1 0 Mar-10
Revenue ( Rs mn) 4 4,20 6.4 96 3,04 5.2 3 00,7 67.0 299,867.3 7 4,39 2.6
EBITDA margins (%) 8.6 6.1 13.4 13.2 1 0.2
PAT (Rs mn) 3,06 8.5 4,20 6.7 26,2 47.0 28,895.2 4,23 6.7
PAT margins(%) 6.9 0.4 8.7 9.6 5.7
Gearing (x) - n.m 0.1 1.3 1.0
EPS (Rs/share) 11 3.9 7.4 90.8 51.1 3.2
PE (x) 9.3 18 3.3 15.7 14.7 2 2.5
P/BV (x) 1.5 n.m 3.4 4.1 4.2
RoCE (%) 2 2.7 1 8.8 31.9 23.4 1 3.9
RoE (%) 1 7.4 n.m 24.2 30.1 1 9.6
EV/EBITDA (x) 4.5 1 7.6 10.4 13.4 1 4.7
n.m: Not meaningful

Key Financial Indicators

FINANCIAL PROFILE
Units Dec-08 Dec-09 Dec-10
Significant growth in revenues and bottom-line Revenue Rs mil li on 17,314.6 29,650.1 44,206.4
Revenues grew at a CAGR of ~60% between CY08 and CY10. Eicher recorded top-line EBITDA ma rgins Per cent 0.7 5.8 8.6
of Rs 44.2 bn for CY10, up ~50% from CY09, principally due to an increase in sales PAT Rs mil li on 672.9 1,294.9 3,068.5
volume of commercial vehicles from 25,164 nos. in CY09 to 39,275 nos. in CY10. The
sales volume of Royal Enfield also grew from 51,955 in CY09 to 52,576 in CY10. PAT ma rgi ns Per cent 3.9 4.4 6.9
Revenue growth Per cent 1.2 28.4 49.1
EBITDA margins increased by ~280 bps on account of decrease in employee cost and
marketing cost as compared to the previous year. EBITDA growth Per cent -86.7 894.1 123.5
PAT growth Per cent 68.9 44.3 137.0
PAT grew ~137% to Rs 3.06 bn vis-à-vis Rs 1.3 bn in CY09, primarily due to higher
operating profit and increase in other income. Gea ring Ti mes 0.1 0.1 0.0
RoCE Per cent 7.8 11.4 22.7
RoE Per cent 8.9 8.0 17.4
INDUSTRY PROFILE

Automobiles
The Indian automobile industry grew by 14% to Rs 1547 Bn in 2009-10. The industry which had witnessed steady growth until 2007-08, with rise in income levels and
favourable demographic profile, was impacted in 2008-09 on account of slower economic growth, crunched finance scenario, poor consumer sentiments and input cost
pressures. However, stimulus packages by the government enabled a quick recovery across segments in second half of 2009-10. The automobile industry has also
witnessed a number of structural changes over the past few years with launch of innovative vehicle models at competitive prices and emergence of the hub and spoke
model for commercial vehicles. Rise in rural incomes, player focus on rural sales and launch of low cost car enabled higher car sales. However, entry of new players has
increased competitive intensity across auto segments.

CRISIL COMPANY REPORT | 2

Eicher Motors Ltd
ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Dec-08 Dec-09 Dec-10 (Rs million ) Dec-08 Dec-09 Dec-10
Net Sales 17,167.6 29,442.6 43,884.3 Equity share capital 280.9 266.9 269.4
Operating Income 17,314.6 29,650.1 44,206.4 Reserves and surplus 15,828.7 16,024.1 18,679.4
Tangible net worth 16,109.6 16,291.0 18,948.8
EBITDA 128.7 1,705.8 3,811.7 Deferred tax liablity:|asset| -147.2 141.6 249.2
EBITDA Margin 0.7 5.8 8.6 Long-term debt 813.3 154.9 66.5
Short-term-debt 793.4 1,058.7 833.6
Depreciation 368.9 538.8 573.0 Total debt 1,606.7 1,213.6 900.1
Interest 129.6 97.1 104.4 Current liabilities 4,242.3 6,065.6 7,997.8
Other Income 552.2 881.9 1,030.6 Total provisions 788.6 962.0 1,390.6
Total liabilities 22,600.0 24,673.8 29,486.5
PBT 574.9 1,911.9 4,176.7 Gross block 5,751.3 6,503.9 7,119.3
PAT 672.9 1,294.9 3,068.5 Net fixed assets 3,577.2 3,611.4 4,400.4
Investments 62.4 2,941.1 4,585.9
PAT Margin 3.9 4.4 6.9 Current assets 18,960.4 18,121.3 20,500.2
Receivables 1,801.9 2,325.3 2,609.3
No. of shares (Mn No.) 28.1 12.7 26.9 Inventories 3,380.7 2,189.6 3,265.2
Cash 12,600.5 11,706.5 12,456.8
Earnings per share (EPS) 31.9 102.3 113.9 Total assets 22,600.0 24,673.8 29,486.5

Cash flow Ratio

(Rs million ) Dec-08 Dec-09 Dec-10 Dec-08 Dec-09 Dec-10
Pre-tax profit 182.4 1,951.8 4,164.9 Revenue growth (%) 1.2 28.4 49.1
Total tax paid -402.4 -328.2 -1,000.6 EBITDA growth(%) -86.7 894.1 123.5
Depreciation 368.9 538.8 573.0 PAT growth(%) 68.9 44.3 137.0
Change in working capital -944.8 1,941.8 732.2
EBITDA margins(%) 0.7 5.8 8.6
Cash flow from operating activities -795.9 4,104.2 4,469.5 Tax rate (%) 57.8 15.2 24.0
Capital Expenditure -836.9 -486.5 -1,362.6 PAT margins (%) 3.9 4.4 6.9
Investments and others 2,550.0 -2,878.7 -1,644.8
Dividend payout (%) 20.9 14.4 9.7
Dividend per share (Rs) 5.0 14.8 11.0
Cash flow from investing activities 1,713.1 -3,365.2 -3,007.4 BV (Rs) 573.5 1,286.8 703.4
Equity raised/(repaid) 5,867.9 -152.0 227.9 Return on Equity (%) 8.9 8.0 17.4
Debt raised/(repaid) -539.4 -393.1 -313.5 Return on capital employed (%) 7.8 11.4 22.7
Dividend (incl. tax) -164.4 -218.7 -345.5
Others (incl extraordinaries) 5,999.9 -869.2 -280.7 Gearing (x) 0.1 0.1 0.0
Interest coverage (x) 1.0 17.6 36.5
Debt/EBITDA (x) 12.5 0.7 0.2
Cash flow from financing activities 11,164.0 -1,633.0 -711.8
Change in cash position 12,081.2 -894.0 750.3 Asset turnover (x) 4.2 4.8 6.5
Opening cash 519.3 12,600.5 11,706.5 Current ratio (x) 3.3 2.6 2.4
Closing cash 12,600.5 11,706.5 12,456.8 Gross current assets (days) 298 215 166
n.m : Not meaningful;

QUARTERLY RESULTS

Profit and loss account

(Rs million) Dec-10 % of Dec-09 % of Sep-10 % of
No of Months 3 Revenue 3 Revenue 3 Revenue
Revenue 12,673.7 100.0 9,013.0 100.0 11,166.6 100.0
EBITDA 1,443.4 11.4 656.5 7.3 1,022.1 9.2
Interes t 8.2 0.1 21.4 0.2 31.6 0.3
Depreci a tion 146.6 1.2 149.3 1.7 147.6 1.3
PBT 1,288.6 10.2 485.8 5.4 842.9 7.5
PAT 937.2 7.4 301.6 3.3 640.0 5.7

CRISIL COMPANY REPORT | 3

Eicher Motors Ltd
FOCUS CHARTS & TABLES

Rs m n Quarterly sale s & y-o-y grow th Pe r ce nt Rs mn Quarterly PAT & y-o-y growth Per cent
14 ,000 80 1,000 600
12 ,000 70
60 500
800
10 ,000 50 400
8 ,000 40 600
30 300
6 ,000 20 200
400
4 ,000 10
0 100
2 ,000 -10
200
0
0 -20
8 8 9 9 9 0 0 0 0 -100
9 0
-0 -0 -0 -0 -0 -0 -1 -1 -1 -1

Sep-08

Dec-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

Dec-10
Mar-09

Mar-10
p c ra n p c ra n p c
eS e u
J eS e u
J eS e
D M D M D
Sales Sales gr owth y -o-y (RHS)

Net Profit Net profit growth y-o-y (RHS)

Rs/share EPS Per cent Movement in operating and net margins

25 14

20 12
10
15
8
10 6
4
5
2
0 0
8 8 8 9 9 9 9 0 0 0 0 8 8 8 9 9 9 9 0 0 0 0
-0 -0 -0
c -0
ra -0 -0 -0
c -1
ra -1 -1 -1
c 0
- -0 0
-c -0 0
- -0 0
-c -1 1
- -1 1
-c
n p e n p e n p e n p ra n p ra n p
u
J eS u
J eS u
J eS u eS e u eS e u eS e
D M D M D J D M J D M J D
OPM NPM

Shareholding Pattern (Per cent) Board of Directors

Mar 2010 Jun 2010 Sep 2010 Dec 2010 Director Name Designation
Promoter 55.8 55.7 55.6 55.3 R.L. Ra vi cha ndra n (Mr.) Di rector
FII 11.6 11.0 11.1 9.7 Sa ndil ya Sriniva s a n (Mr.) Non-Executi ve Cha irma n
DII 9.6 10.5 10.8 12.7 Si ddha rtha La l (Mr.) Ma na ging Director
Others 23.0 22.9 22.5 22.3 Priya Bra t (Mr.) Non-Executi ve Di rector
Pra teek Ja l a n (Mr.) Non-Executi ve Di rector
Ma nepa nda Joya ppa Subba ia h Non-Executi ve Di rector
(Mr.)

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Disclaimer
This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as
such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment,
legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial
liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or
redistributed or communicated directly or indirectly in any form to any other person – especially outside India or published or copied in whole or in part, for any purpose.

CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please
contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

CRISIL COMPANY REPORT | 4