Last updated: 13 Aug, 2021 | 10:23 am
Revenue and Profit miss estimates: Hero MotoCorp has reported a standalone net profit of Rs 365 crore for the Apr-Jun quarter, up by a massive 498% when compared with a meagre Rs 61 crore in the same period last year. However, the profit fell 58% on a sequential basis from Rs 864 crore in the March quarter. Analysts had expected a net profit of Rs 463 crore. Revenue from operations came in at Rs 5,487 crore in the reporting quarter, up 85% from Rs 2,971 crore in the year-ago period. Sequentially profits fell by 37%. Analysts had expected it to be around Rs 5,847 crore. The numbers are higher as compared to the previous year due to a lower base (impacted by lockdowns in Apr-Jun 20).
Operating Margins: The EBITDA for the quarter stood at Rs 515 crore as compared to Rs 108 crore last year period, translating to 9.4% EBITDA margin and a growth of 376%. However, sequentially the EBITDA nearly fell 57% and the margins dropped 4.5% from 13.9% last quarter. Commodity costs continued to rise, and are impacting the industry margins.
Sales Volume: The company sold 10.25 lakh units of motorcycles and scooters in the quarter ended June, a growth of 81% from the last year. However the sales dropped 35% sequentially because local lockdowns stalled production and shut dealerships in most parts of the country. High cost of ownership due to costly fuel, a series of price hikes prior to the pandemic and then again to counter the surge in commodity costs, too, weighed on the sales.
Hero MotoCorp Q1: Important highlights
Hero MotoCorp Q1 Results Review:
Hero MotoCorp has reported Q1 earnings below street estimates because of Covid-19 induced disruptions. Nearly half of the Apr-Jun 21 quarter witnessed significant disruptions triggered by localised lockdowns, thereby restricting movement of logistics and dampening customer sentiments. The strong growth in net profit and sales on a yearly basis was aided by a depressed base in the year-ago quarter, which was impacted by the national lockdown due to covid-19 pandemic. The company, however, remains optimistic about demand over the coming months. With the start of the festive season, a healthy monsoon, encouraging farm activity the company expects numbers to improve going forward. The company improved its market share by more than 200 bps over the last year.
Hero MotoCorp Ltd. missed analysts’ estimates in the quarter ended June as commodity costs rose and sales declined amid local lockdowns to curb the second Covid-19 wave. ICICI Securities said the company was witnessing demand pressures in the entry-level segment due to weak consumer sentiment, and rising vehicle prices further hit profitability. The company’s multi-pronged strategy (Ather/Gogoro) bodes well for its future product launches. ICICI Securities maintained an ‘Add’ rating with target price of Rs 2,965. Motilal Oswal has also maintained a ‘Buy’ rating with a target price of Rs 2,513.