Hero MotoCorp shares closed 0.33 per cent down at Rs 2,605.05 on Tuesday ahead of its second quarter earnings to be announced later in the day. Market experts believe the company may register a fall in topline and bottomline figures figures for the quarter ended September 30, 2015.
According to KR Choksey Shares and Securities, Hero MotoCorp’s earnings are expected to decline by 3 per cent year-on-year (YoY) on account of 7 per cent YoY decline in volumes. The operating margins are also expected to decline sequentially due to volume de-growth.
For the quarter ended June 2015, the auto maker posted net profit of Rs 750.34 crore, up 33.33 per cent, against Rs 562.76 crore in the corresponding quarter a year ago. Net sales of the company slid 2.05 per cent YoY to Rs 6,855.98 crore.
Angel Broking in a research note said, Hero’s topline is expected to decline 4 per cent YoY to Rs 6,657 cr. Hero’s volumes have declined 7 per cent during the quarter largely due to subdued two wheeler industry and market share loss in the scooter segment. Realisation is estimated to grow 3 per cent mainly due to price hikes. On the EBIDTA front, the margins are likely to improve 120 basis points yoy to 14.7 per cent on account of cost control initiatives under the margin improvement programme “Leap”. EBIDTA is estimated to grow 5 per cent yoy to Rs 980 cr. However higher depreciation on account of capacity expansion and lower other income, the net profit may decline 5 per cent YoY to Rs 726 cr.