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Informist, Thursday, Feb. 6, 2025

 

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--Hero MotoCorp Oct-Dec net profit INR 12.03 bln 
--Analysts saw Hero MotoCorp Oct-Dec net profit INR 11.19 bln 
--Hero MotoCorp Oct-Dec net profit INR 12.03 bln vs INR 10.73 bln 
--Hero MotoCorp Oct-Dec revenue INR 102.11 bln vs INR 97.24 bln year ago 
--Hero MotoCorp to pay INR 100 per share interim dividend 
--Hero MotoCorp Apr-Dec net profit INR 35.29 bln vs INR 29.52 bln year ago 
--Hero MotoCorp Apr-Dec revenue INR 308.18 bln vs INR 279.36 bln year ago 
--Hero MotoCorp Oct-Dec EBITDA INR 14.76 bln 
--Hero MotoCorp Oct-Dec EBITDA margin 14.5% 
 

 

By Anand JC

 

MUMBAI – Flat volume growth despite the festival season meant the year-on-year growth of Hero MotoCorp Ltd.'s net profit for the December quarter was the slowest in eight quarters, while revenue growth was the weakest in five quarters.

 

Hero MotoCorp's net profit was INR 12.03 billion in the December quarter, up 12% higher on year. Analysts had expected the bottom line at INR 11.19 billion. Sequentially, the company's net profit was almost.

 

The revenue from operations was INR 102.11 billion during the reporting quarter, up 5% from a year ago. The revenue was also higher than analysts' estimate of INR 101.23 billion. The company has reported a top line of over INR 100 billion for the third consecutive quarter.

 

Hero MotoCorp's earnings before interest, taxes, deprecation, and amortisation for the final quarter of 2024 was INR 14.76 billion, up 8% from a year ago. Its EBITDA margin for the reporting quarter was 14.5%, lower than the 15.1% a year ago.  

 

The New Delhi-based two-wheeler giant's other income was INR 3.18 billion, up 31% from a year ago and 12% sequentially.

 

SALES SCENARIO

The earnings growth of Hero MotoCorp for the December quarter was expected to be restricted to mid-single digits primarily due to a slowdown in the two-wheeler industry as a whole. This is despite companies offering heavy discounts during the quarter which sees major festivals. Hero MotoCorp despatched 1.46 million units to dealers, including motorcycles and scooters, during the quarter, barely an improvement year-on-year. In the first nine months of the financial year, Hero MotoCorp despatched 4.5 million units, 6% higher compared to the same period a year ago.

 

However, the company said its retail sales for the quarter hit a record high, driven by record high festival season sales. Hero MotoCorp gained market share in the 100 cubic centimetre capacity segment through 'Splendor' and in the 125cc segment through 'Xtreme 125R' and 'Super Splendor', the company said without giving details.

 

The company said its growth was led by robust performance in the electric vehicle and global business. Hero Moto Vida, the company's electric scooter brand, saw its highest-ever monthly retail sales, and gained market share during the quarter.

 

 

The income tax breaks announced in the Budget are likely to drive demand, the company said. "The Union Budget 2025's emphasis on tax relief for the middle class, along with continued investment in infrastructure and support for the agricultural sector, is expected to boost consumer confidence and drive demand growth in the auto industry," Chief Financial Officer of Hero MotoCorp Vivek Anand said. In the Budget, the government proposed to exempt individuals earning up to INR 1.2 million in a financial year from paying income tax and tweaked income tax slabs.

 

EXPENDITURE PROFILE

 

In the pre-earnings reports, analysts were hopeful of a recovery in exports and softness in raw material prices offsetting some of the lull in the local markets. The company's export sales during the reporting quarter were better than industry average, with growth seen in Bangladesh and Colombia, Hero MotoCorp said.

 

Raw material prices, which constitute nearly 75% of its total expenses, grew only 1.7% on year during the December quarter to INR 65.99 billion. This was despite its total expenses registering a 5% on-year increase for the reporting quarter to INR 89.37 billion. Other expenses and employee benefits expenses for the latest quarter grew 12% and 10%, respectively.

 

In the final three months of 2024, Hero MotoCorp's tax expenses increased 13% on year to INR 3.88 billion.  

 

In Apr-Dec, the company introduced a voluntary retirement scheme for its employees. The company spent INR 1.60 billion toward those who opted for it, and has accounted for it as an exceptional item. The company's board signed off on an interim dividend of INR 100 per share, and has fixed Feb. 12 as the record date. 

 

The board also approved an investment of up to INR 515 million for a 26% stake in CleanMax Enviro Energy Solutions Pvt. Ltd. The company will set up a special purpose vehicle for a solar power wheeling project at its plant in Dharuhera and Gurugram under group captive mechanism. The acquisition is expected to be completed in a year.

 

For Apr-Dec, Hero MotoCorp's net profit was INR 35.29 billion, up 20% from the corresponding period a year ago. The revenue from operations during the nine months grew 10% to INR 308.18 billion. 

 

On Thursday, shares of the company ended at INR 4,230.05 on the National Stock Exchange, down 0.9% from the previous close. Hero MotoCorp announced its results for the quarter after the market hours.   End

 

Edited by Saji George Titus

 

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