Hero MotoCorp Q3 profit beats projections: Key takeaways

Mumbai: Hero MotoCorp posted a Street-beating 14.5 per cent rise in third-quarter profit, but expressed concerns over economic slowdown. The firm expects to see a positive turnaround in the second half of the next financial year.

The country’s largest two-wheeler maker reported a standalone profit of Rs 880.41 crore for the quarter ended December 31 compared with a profit of Rs 769.10 crore in the same period last year. Analysts in an ET NOW poll had projected the number at Rs 700 crore.

The company's revenue from operations for the quarter stood at Rs. 6,997 crore compared with Rs. 7,865 crore in the same quarter a year ago.


Here are the key takeaways:

Volumes drop: The company sold 15,40,876 vehicles during the quarter against 17,98,905 in the corresponding quarter last year.

Dividend bonanza: The company announced a dividend of Rs 65 per share.

Management commentary: "The two-wheeler industry continues to face challenges amidst an overall economic slowdown. Early indicators, such as a positive Rabi crop, augur well for the rural economy, which in turn is likely to help the industry,” said CFO Niranajan Gupta.

“The slew of measures announced by the finance minister as part of Budget would also go a long way in reviving the economy. However, it will take some time for the two-wheeler industry to see a sustained recovery. We expect to see a positive turnaround in the second half of the new fiscal (FY'21),” he added.

New launches: During the third quarter, the company launched India's first BS-VI motorcycle, the Splendor iSmart and then followed it with the first BS-VI motorcycle in the entry segment- the HF-Deluxe.

It is geared-up to transition its entire product range to the new emission norms well before the regulatory deadline and plans to stop all BS IV production by mid- February.