Hero MotoCorp profit declines 27%, revenues fall 14%
Hero MotoCorp on Tuesday reported a 27.51% year-on-year (y-o-y) decline in its standalone net profit to Rs 627.05 crore for the January-March quarter owing to low volumes and high input costs. The Bloomberg consensus estimate had pegged the net profit at Rs 624.91 crore. The revenue from operations not only fell 14.55% y-o-y to Rs 7,421.73 crore during the quarter, but was also lower than the Bloomberg consensus estimate of Rs 7,465.06 crore.
The company’s operating margins plunged 270 basis points y-o-y to 11.2% in Q4FY22. Ebitda (earnings before interest, tax, depreciation and amortisation) was down 31.63% y-o-y to Rs 828 crore, lower than the Bloomberg consensus estimate of Rs 877.52 crore.
At 1,188,884 units in Q4FY22, Hero MotoCorp’s volumes were 24.19% lower than 1,568,313 units sold in the year-ago quarter. However, the average selling price of two-wheelers rose 12.71% to Rs 62,426 from Rs 55,384 in Q4FY21. It was Rs 61,010 in Q3FY22.
“With the economy picking up, we expect the demand for motorcycles and scooters to see a positive turnaround in the coming months,” said Niranjan Gupta, chief financial officer, adding that while concerns related to high input costs continue to remain a challenge, the company will keep monitoring the situation and take judicious measures as appropriate.
“The forecast of a normal monsoon is likely to aid the crops, which, in turn, is expected to improve cash flows in rural sector. All these factors are likely to help in a steady recovery in consumer sentiments and market demand,” Gupta said.