Informist, Thursday, Nov. 14, 2024

By Darshan Nakhwa

MUMBAI – Hero MotoCorp Ltd. Thursday reported better-than-expected earnings for the September quarter, driven by higher two-wheeler despatches on account of improvement in both domestic sales and exports. The increase in average selling price due to a richer product mix and price hikes during the year also boosted the company's performance for the quarter as India's largest two-wheeler maker clocked its highest-ever quarterly revenue and net profit.

The New Delhi-based company earned a net profit of INR 12.04 billion in Jul-Sept, up 14.2% from the year-ago period. However, this is the lowest bottom-line growth reported by Hero MotoCorp on a year-on-year basis in the past seven quarters. Brokerages had pegged the metric at INR 11.56 billion for the quarter.

In Jul-Sept, the two-wheeler maker's revenue from operations rose 10.8% on year to INR 104.63 billion, driven by 7% growth in volumes. Brokerages had projected the company's top line at INR 102.55 billion. Its other income came in at INR 2.83 billion, up 14% on year. The company also reported its highest-ever quarterly revenue from parts, accessories, and merchandising at INR 14.56 billion.

"We have continued our exceptional performance in Q2 (Jul-Sept) FY25, once again creating a new high in both the top line and bottom line," said Niranjan Gupta, chief executive officer of Hero MotoCorp in a press release. "Our strong focus on cash management has resulted in us delivering strong cash flow, strengthening our financial position even further."

In Jul-Sept, Hero MotoCorp sold a total of 1.52 million two-wheelers, representing a growth of 7% from a year ago. The sales growth was powered by improvement in rural demand due to the above-normal monsoon and the expectation of strong demand during Ganesh Chaturthi and Onam. It was also on the back of a low base last year when the company had reported weakness in sales of entry-level motorcycles due to sluggish rural demand. The two-wheeler manufacturer sold a total of 1.46 million two-wheelers in India in Jul-Sept, registering a growth of nearly 7% from a year ago, and exported 63,180 units, up 20% on year.

"While our existing line-up of strong brands continues to deliver in the entry and deluxe segment, our journey to build a powerful portfolio in the premium segment is progressing with pace... Apart from the portfolio, we will continue to expand Premia stores, targeting to cross 100 stores by the end of the current fiscal year. Our strong financials will allow us to now aggressively invest in brand building," Gupta said. The company is also planning to launch three internal combustion engine scooter models by March, and will expand its VIDA electric scooter portfolio.

In Jul-Sept, the company's earnings before interest, tax, depreciation, and amortisation came in at INR 15.16 billion, up 14% on year. Brokerages had pegged the metric at INR 14.99 billion. Its EBITDA margin expanded by 40 basis points on year to 14.5% during the quarter.

For the September quarter, Hero MotoCorp's total expenses rose 10% on year to INR 91.46 billion. Cost of raw materials, the company's biggest expense, rose 6.7% on year to INR 69.17 billion. The company's other expenses rose 23.7% on year to INR 13.14 billion and employee-related costs grew 13.3% to INR 6.54 billion. Its tax outgo for the quarter was INR 3.97 billion, compared with INR 3.43 billion in the year-ago period.

For Apr-Sept, the two-wheeler maker clocked a net profit of INR 23.26 billion, up 23.8% on year, on revenue of INR 206.07 billion, up 13.2% on year. On Thursday, Hero MotoCorp's shares closed 1.9% higher at INR 4,604 on the National Stock Exchange. The two-wheeler maker announced its Jul-Sept earnings after market hours. End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.