Whalesbook
Planning for Growth: New Plant or Pithampur Upgrade?
Classic Legends is preparing for major growth, planning a significant capacity increase to meet surging demand. Co-founder Anupam Thareja said the company is considering two main options: expanding its Pithampur plant to 200,000 units per year or building a new, greenfield facility closer to suppliers. The Pithampur plant is expected to reach its maximum output by the end of the fiscal year. Classic Legends has committed about ₹1,000 crore for capital spending from FY23 to FY26 to boost production and develop new models. This investment aims to secure a larger share of India's growing premium motorcycle market.
Sales Surge Drives Need for More Production
This expansion push follows a strong recovery that started in late 2018. After initial challenges and missed sales goals, Classic Legends' annual sales fell to 32,430 units in FY25. But several factors have fueled a comeback. Launching four new models and a reduction in GST for motorcycles up to 350cc (from 28% to 18% in September 2025) made its Yezdi, Jawa, and BSA bikes more affordable and popular. This shift, along with recent investment, resulted in a 39.80% sales increase in FY26, with 45,409 units sold (FADA). The company expects production to surpass 100,000 units by FY27, as current orders already exceed its production capabilities.
Royal Enfield Dominates as Market Grows
Classic Legends faces fierce competition, especially from Royal Enfield, which dominates the market. Royal Enfield holds a 95% share in India's domestic 250-350cc motorcycle category and a 28% share in the 350-500cc segment, selling over 1.1 million units in FY26. India's premium motorcycle market is growing rapidly, with bikes over 125cc making up about 26% of total sales in FY26, driven by higher incomes and changing consumer desires. The recent GST cut for sub-350cc bikes has greatly helped companies like Classic Legends by making models more affordable. However, a planned GST increase to 40% for motorcycles over 350cc, starting September 22, 2025, could affect sales of larger premium bikes for all manufacturers. Classic Legends recently introduced the Yezdi Scrambler 350 and BSA Scrambler 650, aiming to attract adventure riders by calling them "SUVs of motorcycling."
Challenges Ahead: Execution and Competition
Despite the positive outlook, Classic Legends faces significant challenges. The company has a history of missing sales targets and saw sales drop in previous years, highlighting difficulties in scaling operations and managing product launches. Current success might rely partly on temporary factors like the GST cut, raising doubts about sustained demand without these benefits. Investing heavily in a new greenfield plant carries execution risks, including potential cost overruns and delays. Competing directly with Royal Enfield, which has strong brand loyalty and a wide range of products, remains a major hurdle. Co-founder Anupam Thareja's other business roles, including at Phi Capital and Mahindra First Choice Wheels, could also impact his focus. Classic Legends aims for an IPO in 2028, setting a deadline for achieving financial goals.
EVs and IPO: Looking Beyond Motorcycles
Classic Legends is set to leverage the growing Indian premium motorcycle market, aiming for over 100,000 units in production by FY27. The company is also developing electric motorcycles for its Jawa, Yezdi, and BSA brands, with plans to launch them first in Europe before bringing them to India. This move into electric vehicles shows awareness of future market shifts. Classic Legends aims to achieve profitability this fiscal year. Its investments and capacity plans are focused on continuous growth, with the potential 2028 IPO serving as a key measure of its progress and market value.