Hero MotoCorp Q3 results today: What to expect from India’s largest 2-wheeler maker?

Hero MotoCorp is slated to release its earnings for the December quarter later today, and the country’s largest two-wheeler maker is expected to put up a robust show across key parameters.

The automaker is likely to report a healthy double-digit growth in earnings on the back of robust sales volumes and higher realisations.

Let’s look at the key expectations and the other factors to watch out in the earnings:

Core Earnings

Brokerage Axis Securities expects Hero MotoCorp to report a 20% year-on-year (YoY) growth in revenue and a 2% rise sequentially, led by higher volumes and increased prices.

The average selling price of vehicles has gone up by 2% YoY, according to analysts.

Sales volumes for the company have increased by 18% YoY and 3% sequentially in the last quarter.

Profitability

Led by higher volumes and better realisations, Hero MotoCorp is seen reporting strong double-digit growth in the operating profit and a significant expansion in both gross and operating margins.

Kotak Institutional Equities expects a strong 45% YoY growth in the earnings before interest, taxes, depreciation and amortization or EBITDA to Rs 1,337 crore. Operating margin is expected to expand 236 basis points to 13.9%, but contract by 20 bps sequentially.

However, margins are seen contracting sequentially, due to weaker product mix, higher discounts in the entry-level segment due to the festive season, which may be partly offset by operating leverage benefits, price increases, and lower advertisement spends.

Key Monitorables

Among the key monitorables for investors and analysts will be the planned product launches for 2025, raw material price outlook, advertising spend trajectory, and rural vs urban demand outlook.

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