Hero MotoCorp Q2 Results: PAT falls 10% YoY to Rs 716 cr, misses estimates

Hero MotoCorp on Thursday reported a 10% year-on-year (YoY) fall in net profit for the quarter ended September to Rs 716 crore. The bottomline was lower than ET Now poll of Rs 746.2 crore.

Revenue in the quarter rose by a moderate 7.4% on year to Rs 9,075.35 crore, but the topline was higher than the expected Rs 8,812 crore.

Unlike Bajaj Auto, which saw a Y-o-Y growth in sales volumes, Hero MotoCorp’s vehicle sales in the last quarter dipped by around 1% to 14.28 lakh units.


Higher costs, weak operational performance and moderate sales growth weighed on the overall earnings of the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 2.6% on year to Rs 1,038 crore, and operating margin shrunk by 117 basis points to 11.44%.

Raw material costs rose more than 7% on year as well as sequentially to Rs 6,517 crore.

“The global macro headwinds may keep the playfield a bit uncertain, and navigating the same over next few quarters will be important,” Niranjan Gupta, chief financial officer, was quoted as saying in the release.

However, as the commodities cool off, and the rate cycle reaches its peak, the medium term outlook for the Indian auto industry appears quite encouraging, Gupta said.

Although earnings growth was muted in the last quarter, the company is hopeful of a recovery in the coming quarters. A healthy festive period demand across most categories and specifically in auto sector have
demonstrated that the underlying propensity to spend has gone up.

“The consumer confidence is coming back, which augurs well for growth momentum moving forward,” Gupta said.