Beats estimates on the back of higher realisations, lower input costs & reduction in royalty payment
The country’s largest two-wheeler manufacturer by volume, Hero MotoCorp, on Monday beat analysts’ estimate by posting a 33.3% jump in net profit at Rs 750.3 crore on year-on-year basis in the April-June quarter on the back of higher realisations, lower input costs and reduction in royalty payment.
Revenues during the period, however were a tad below estimates at Rs 6,955.26 crore, 1.1% lower than the same period last year. Net sales were down 2.04% at Rs 6,856 crore.
Ebitda at Rs 1047.84 crore was up 11% on a year-on-year basis, which was above estimates, while the margin was at 15.1% compared to 13.3% in the same period last year.
The company sold 16,45,867 units during the period against 17,15,129 units sold in the same quarter last year, recording a contraction of 4.2%. It lost on sales in the current financial year in the domestic market on account of slowdown in the rural market, which comprises almost 50% of domestic sales.
“In the first quarter of FY16, we continued to strengthen our market leadership through a combination of product launches and strategic marketing initiatives,” chairman and CMD Pawan Munjal said. He added that two of the company’s models, Xtreme Sports and Passion Pro, witnessed a “very positive response”. “We expect the industry to move in an upward trend in the coming quarters, though a lot will depend on multiple factors, including good monsoon, rural income and overall market sentiment,” Munjal added.
The company’s tax outgo was at Rs 290 crore against Rs 200 crore in the previous year.
During the quarter, the company also invested Rs 4.16 crore in HMCL Netherlands as part of capital contribution, and invested another Rs 22.22 crore as part of capital contribution in its new wholly owned subsidiary HMCL Americas. “The subsidiaries would act towards furtherance of business interest,” the company said.
Hero MotoCorp shares closed up 0.87% at Rs 2,697.85 on the BSE. However, the results came post trading hours.