Stock I Regret Not Investing In - 2021
A stock with great learning & 145% returns in 5 years
Back in 2021, I read a report that beautifully explained Eicher Motors' business.
What stood out for me was how the company never spends on ads (have you seen one?), yet they get “free marketing”. All lead actors in movies ride Royal Enfield 350 - what else does a brand want?
I did more research on the stock and was interested after doing fundamental analysis. Back then, if I remember correctly, the stock was trading below Rs 3000 per share. Today, it is over Rs 7000 per share, which is why I regret not investing in it.
For more such content on investing, stocks, IPO, and stock analysis, subscribe to the newsletter for FREE.
I publish 15+ blogs on my Substack every week. But send only one to your inbox. Keep visiting to read more. Join Whatsapp Community to get all posts.
Eicher Motors: Business Model
Here are a few key USP of the business:
A differentiated consumer brand with pricing power. Royal Enfield markets an emotional experience: simplicity, heritage, and a distinctive riding culture. That brand equity supports premium pricing in India and faster adoption in overseas niche markets.
Strong product-led portfolio anchored in the 350–650cc segments. These engine-size segments are less crowded than entry-level scooters and small commuter bikes and carry higher margins per unit. New model launches keep the funnel fresh.
Scalable manufacturing and distribution. Investment in plants and dealer networks lets the company grow volumes without proportionate increases in fixed costs per unit.
Diversification via VECV. The VE Commercial Vehicles JV gives exposure to the commercial-vehicle aftermarket and heavy-duty truck demand. This reduces pure-play motorcycle risk.
Healthy balance sheet. The company is largely debt-free and generates cash, which both funds launches and returns capital to shareholders when appropriate.
Growth Drivers Going Forward
Product pipeline and model refreshes. Continued launches in ICE bikes plus selective electrification or e-bike experiments can expand the addressable market.
Geographic expansion. Royal Enfield is still under-penetrated in many international markets; exports have been expanding at high rates.
Aftermarket, accessories, and experiences. Brand-led monetization beyond the bike sale (gear, events, services) can lift per-customer lifetime value.
Commercial-vehicle recovery and JV scale. VECV contribution can act as a growth buffer if freight and CV cycles turn up.
Below is a screenshot of their recent numbers - their growth is always more or less the same.
Risks and Red Flags
Margin pressure from growth-over-profit choices. Management’s strategy of funding launches, expanding lower-margin models, and new categories has raised concern that sales growth is being prioritized at the expense of margins. Several brokers flagged that trend, and the market reacted when margins softened. This is a material near-term risk to earnings momentum.
High valuation. The stock trades at premium multiples versus mainstream two-wheeler peers. If growth disappoints, the downside could be sharp.
Execution risk with new segments. Electric bikes, entry-level models, or overseas launches each require sustained investment and can dilute the brand if not executed carefully.
Cyclicality in commodities and supply chain. Raw-material inflation and logistics can squeeze margins at scale.
Competition. Global OEMs and nimble domestic players could target similar mid-capacity segments if profitability attracts them.
A Great Learning Stock
Eicher Motors Share Price Journey: 20 years
If you break Eicher Motors’s last two decades into five-year chapters, the stock’s journey becomes very clear.
2005–2008: The forgettable phase
Earnings growth was uninspiring. Operating margins stayed in single digits. There was no clear growth driver and no strong narrative. The stock largely went nowhere, and investors had little reason to stay interested.
2008–2012: The inflection point
Growth accelerated from a low base, and margins began improving. Two things changed the story. The Volvo joint venture brought credibility to the commercial vehicle business, and Royal Enfield sales started picking up meaningfully. The market responded sharply. The stock delivered nearly a 10x move during this period.
2012–2016: The golden run
This was peak execution. Earnings grew rapidly, operating margins expanded into high double digits (37% profit margin was their best), and Royal Enfield became a category-defining brand. Volumes, pricing power, and operating leverage all worked together. The stock compounded another eight times, cementing Eicher’s reputation as a true wealth creator.
2016–2020: Pause and consolidation
Growth moderated, but margins held up. The business was no longer surprising on the upside, and expectations were already high. The stock reflected that, moving only marginally despite stable fundamentals. This phase was more about digestion than expansion.
2020–2025: Scale with ambition
Royal Enfield entered a new phase of scale, consistently posting record sales and pushing aggressively into exports. At the same time, VECV evolved into a meaningful commercial-vehicle platform through partnerships and JV scale. Eicher began to be viewed not just as a motorcycle brand, but as a combination of a strong consumer franchise and a steady industrial business.
What Eicher Motors Share Price Teaches Us?
The Eicher Motors journey makes one thing very clear.
Wealth was not created every year. It was created in short, powerful phases.
For long stretches, the stock did nothing. Then, when earnings, margins, or the business model visibly changed, the stock delivered sharp run-ups in a short time. Investors who tried to time entries and exits often missed these bursts. Investors who simply stayed invested captured them.
The core lesson: Money in stocks is rarely made in a straight line. It is made by holding through dull phases so you are present when the re-rating arrives.
Eicher rewarded patience, not activity. The biggest gains went to those who stayed invested long enough to experience multiple growth cycles, rather than those who traded around short-term noise.
Time in the stock mattered far more than timing the stock.
Will I Reconsider Investing?
Not at the current levels. I think 2021 was a better time than today. A missed train and a regret. Some may be wondering why I am covering this, as it has only given 145% in 5 years. What makes this exceptional is that it is a large-cap stock. In the same period, Nifty50 has given 75% returns. A large part of my direct equity investment is in large-caps, and getting 20% CAGR is not just great but exceptional.
Check this if you want to read something different.
Share this with your friend who rides a Royal Enfield and thank him for the increase in share price.
About me - In the last few years, I have noticed that many investors struggle with basic investment concepts. To address this, I have started a personalized newsletter offering easy-to-understand, actionable insights to help investors make better decisions. I have written over 5000+ financial blogs and want to share my knowledge and investing journey with you so you can become a confident investor. Join my journey. SUBSCRIBE NOW