Hero MotoCorp is scheduled to announce its September quarter earnings of FY21 (Q2FY21) on Wednesday. Brokerages expect the two-wheeler manufacturer to report up to 13 per cent increase in profit while revenues are expected to rise over 20 per cent, led by volume growth and increase in realisation.
According to Hero MotoCorp’s monthly auto sales data, the company sold 18.14 lakh units during the quarter under review, up 7.3 per cent from 16.9 lakh units sold in Q2FY20. The company had sold 5.63 lakh units in Q1FY21.
At the bourses, shares of Hero MotoCorp rallied 23.5 per cent during the September quarter as compared to 9 per cent gain in the S&P BSE Sensex, ACE Equity data show.
Here’s a quick look at what leading brokerages expect from Hero MotoCorp’s September quarter nos.
Emkay
The brokerage expects Hero MotoCorp’s revenue to grow 25.7 per cent on YoY basis to Rs 9,518.1 crore from Rs 7,570.7 crore reported in the year-ago quarter, owing to increase in realisation. Realisation, meanwhile, is expected to increase due to BS-VI launches and price hikes. The bottom line is also likely to grow 10.7 per cent YoY to Rs 1,018.7 crore from Rs 919.8 crore reported in Q2FY20.
Emkay expects the company’s gross margin to decrease due to partial pass-through of BS6 impact. Also, Ebitda margin is expected to contract 66 basis points (bps) YoY to 13.9 per cent due to fall in gross margin. Earnings before interest, tax, depreciation, and ammortisation (Ebitda) is seen rising 20 per cent YoY to Rs 1,321.4 crore.
Prabhudas Lilladher
According to the brokerage, with volume increase of around 7 per cent YoY and realisation increase of around 20 per cent YoY on account of recent product price hikes and BS6 pricing, Hero MotoCorp’s revenue should increase 29 per cent YoY to Rs 9,752.6 crore. Net profit is also likely to rise 13.8 per cent YoY at Rs 1,053.6 crore.
Operating margins are expected to remain stable YoY at 14.5 per cent as higher raw material cost is likely to get offset by positive operating leverage. Ebitda is seen at Rs 1,412.2 crore as compared to Rs 1,101.1 crore in Q2FY20.
HDFC Securities
Analysts at HDFC Securities are building a 25 per cent YoY increase in Hero MotoCorp’s Q2 revenues at Rs 9,440 crore, while net profit is seen flat at Rs 920 crore.
“Hero MotoCorp’s two-wheeler volumes are up 7 per cent YoY in Q2. We expect Ebitda margin at 12.8 per cent, up 916 bps sequentially but down 174 bps on YoY basis,” HDFC Securities said.
“Besides, market share trends in the premium segment post the launch of the Xtreme 160cc and festive season expectations and current inventory levels will be the key monitorables,” it said.
BP Wealth
The brokerage is building 24.2 per cent YoY growth in Hero MotoCorp’s Q2 revenues at Rs 9,400 crore, led by strong volume growth. Ebitda margins are expected to remain flat on YoY basis, driven by cost saving and higher operating leverage. Net profit is seen increasing 10.7 per cent YoY to Rs 1,010 crore.
On the operational front, BP Wealth expects Hero MotoCorp’s Ebitda to grow 22.7 per cent YoY to Rs 1,351.6 crore while Ebitda margin may remain almost flat at 14.4 per cent as compared to 14.5 per cent in the year-ago quarter.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
