Whalesbook
Classic Legends has achieved profitability in fiscal year 2026, marking a significant turnaround after years of operational losses. The company reported a 40% year-on-year increase in retail sales, reaching 45,409 units. This performance outpaced the broader 350cc segment's 19% growth. The recovery, driven by new model introductions and strong festive demand, sets up the Mahindra & Mahindra-backed company for an optimistic FY27. Management projects further profit growth and unit sales potentially exceeding 70,000 units.
FY27 Growth Drivers and Margin Support
Several factors support Classic Legends' outlook for FY27. The company expects margin expansion as commodity prices, which rose due to geopolitical events, are forecast to soften. Exports, currently 10% of sales, are targeted to double to 20% by entering new international markets that offer higher margins. Four new motorcycle models are planned to strengthen the company's mid-capacity segment offerings. This focus on internal combustion engine (ICE) models contrasts with the industry's trend toward electrification. Parent company Mahindra & Mahindra, listed on the NSE, holds a market capitalization around ₹3.91 lakh crore with a P/E ratio of 26.03-26.78, reflecting investor confidence in its broad automotive and farm equipment business. M&M's auto segment significantly influences its stock valuation, which has gained 5.37% in the past year.
EV Caution Amidst Industry Acceleration
Classic Legends is taking a cautious stance on the global shift to electric vehicles. Managing Director Anupam Thareja noted that the company's current electric BSA model in the UK is unprofitable. He stressed that its strategy prioritizes brand building for the mid-market segment, independent of competitor moves or short-term market trends. This reserved approach to EVs contrasts with rapid advancements and aggressive market entries from other players. The Indian premium motorcycle market, valued at $2.4 billion in 2025 and projected to reach $5.8 billion by 2034, is growing substantially. Motorcycles above 125cc accounted for roughly 26% of total volumes in the first ten months of FY26.
Competition and Strategic Divergence
Classic Legends operates in a highly competitive market. Royal Enfield, the segment leader, achieved record FY26 sales exceeding 1.2 million units, a 23% increase, with its 350cc models driving volume and market share. Triumph Motorcycles, via its Bajaj Auto partnership, has quickly built a strong presence, selling over 100,000 units in India by March 2026, primarily from its 400cc range. Classic Legends is refocusing its export strategy on Europe after US market entry disruptions from tariffs. A potential GST hike to 40% for motorcycles over 350cc, set for September 2025, could affect sales of larger premium bikes industry-wide. Past quality issues and distribution problems had impacted Classic Legends' sales before its FY26 recovery.
Future Outlook
Classic Legends plans to expand its vendor capacity and distribution network, aiming for over 700 touchpoints by FY28. An IPO is not being considered currently, as capital needs are manageable. Analysts previously held a generally positive view on parent company Mahindra & Mahindra, with a consensus 'Strong Buy' rating from 34 analysts and an average 12-month price target of INR 4,156.59. However, a market update on April 30, 2026, downgraded M&M to 'Hold', citing price weakness and technical signals, indicating caution on the stock's near-term outlook.