Wednesday, December 6, 2023

Hero MotoCorp Q2 Results: Net profit surges 47% YoY to Rs 1054 crore

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The country’s largest two-wheeler maker Hero MotoCorp Wednesday beat street estimates to report an increase of 47% in net profit at Rs 1054 crore for the second quarter that ended September 30, 2023 on the back of price hikes and softening commodity costs.Even as the company reported a robust increase in net profit, Hero MotoCorp Executive Chairman Pawan Munjal took a voluntary pay cut, according to a company filing with the exchanges.

Munjal, who earlier this year decided to separate the roles of Chairman and CEO and appointed Niranjan Gupta as the CEO, has volunteered to reduce his fixed salary by 20%. This was approved by the company’s board Wednesday. The updated remuneration will be made effective January 1, 2024.Hero MotoCorp had reported net profit of Rs 716 crore in the corresponding period of the last financial year. Analysts had expected net profit to increase by a third to Rs 955 crore in the quarter under review.

Revenues from operations went up by 4.1% to Rs 9445.42 crore last quarter, compared to Rs 9075 crore in the year-ago period. Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 28% to Rs 1328 crore last quarter. Ebitda margins improved by 260 basis points to 14.1% aided by softening input costs, cost-savings undertaken by the company and better product mix.

“Our results for the second quarter as well as the first half of the fiscal reflect our continued financial discipline and prudent capital allocation even as we ensure premiumisation of our portfolio”, Niranjan Gupta, Chief Executive Officer at Hero MotoCorp said, adding, “The premium range of products which have been launched across all key models have been received by the customers very well. Our strong margin shape will help us even more in deploying necessary fuel behind growth priorities.”

Gupta said even though global macro headwinds may keep the playfield a bit uncertain, and navigating the same over next few quarters will be important, the medium term outlook for India in general and auto industry in particular appears quite encouraging.“Supported by its relatively stronger macro‐economic fundamentals, India has continued to outperform most of the large global economies. A healthy festive demand across most categories and specifically in the auto sector has demonstrated the underlying propensity of the robustness of the market. The consumer confidence is coming back, which augurs well for the growth momentum forward”, he informed.

Hero MotoCorp sold 14.16 lakh two-wheelers in the three months to Sep 30.

Shares of Hero MotoCorp closed at Rs 3092.20 apiece, up by 0.06% on the Bombay Stock Exchange (BSE). Munjal has been the CEO of Hero Moto since 2001 (then Hero Honda) and became the Chairman in 2016. Gupta has been the CFO since 2017 and became CEO in May this year.

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