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Hero Moto Corp: Quarterly Result update
25-11-2021

Hero Moto | Market Cap 52,370 Cr

P/E 15x Normalized profit

Results: Hero Moto Corp reported 10% decline in sales and 21% decline in volumes. Higher realization and higher share of spare parts helped to arrest decline in operating profit by 17% year on year.

Key highlights

  • Hero’s growth rate was subdued due to delayed monsoon, high base.
  • Hero’s gross margins declined by 1.2% over previous year due to commodity price inflation.
  • Hero took price hikes of Rs. 1200 in Jul’21 and again in Sep’21. Even this price rise dented performance as Hero operates in price sensitive segment of motorcycles.
  • Exports is now 5% of Hero total volumes and growing at fast pace.

Outlook:

  • Premium products now form 6% of total volumes while they will increase to 10% in next 2 quarters.
  • Hero has laid out capex plan of Rs. 1,000 Cr over next 5 years into premium motorcycle, EV and exports.

 

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