Hero Honda Q1 to outperform industry
First quarter earnings of two-wheelers makers are expected to drag due to unfavourable macro-economic factors like double-digit inflation, high loan rates, and increase in input costs.
By ET Online |
MUMBAI: First quarter earnings of two-wheelers makers are expected to drag due to unfavourable macro-economic factors like double-digit inflation, high loan rates, and increase in input costs.
���We are not expecting great numbers from two-wheeler segment. Sales volumes were better due to low base effect of last year. Figures may appear higher but will still remain in single digit,��� said Vaishali Jajoo of Angel Stock Broking.
Two-wheeler sales in June grew by 6.4 per cent to 6,01,941 units from 5,65,433 units in the same period last year. Motorcycle sales rose by 8.2 per cent to 4,73,899 units compared to 4,37,776 units a year ago, according to the figures released by the Society of Indian Automobile Manufacturers.
Among the lot, however, Hero Honda Motors is likely to race ahead in margins compared to peers.
According to Angel Stock Broking, Hero Honda is expected to see 33.3 per cent rise in net profit for the quarter ended June while Bajaj Auto and TVS Motors are likely to see a decline of 12.8 per cent and 17.5 per cent, respectively.
Another analyst said, Hero Honda has got marginal debt on their books, hence its margins are less likely to get impacted because of rise in borrowing cost. However, on the industry, the analyst said, ���2009 will be full of ups and down for auto companies due to high raw material cost and interest rates.���
Prabhudas Lilladher expects Hero Honda to continue to outperform the industry. The brokerage expects the company to post 14 per cent topline growth for April-June. Margins are expected to improve by 74 basis points year on year over a lower base quarter and net profit growth of 20 per cent.
Jajoo of Angel Stock Broking is also positive on Hero Honda but not so on the industry.
���From long-term perspective, we are cautious on two-wheelers as growth visibility is not there. Volumes are likely to go down even further in next two-three months,��� Jajoo added.
At 12:16 pm, shares of Hero Honda were down 2.06 per cent to Rs 692.50 while BSE Auto Index was down 1.11 per cent to 3,566.03.
���We are not expecting great numbers from two-wheeler segment. Sales volumes were better due to low base effect of last year. Figures may appear higher but will still remain in single digit,��� said Vaishali Jajoo of Angel Stock Broking.
Two-wheeler sales in June grew by 6.4 per cent to 6,01,941 units from 5,65,433 units in the same period last year. Motorcycle sales rose by 8.2 per cent to 4,73,899 units compared to 4,37,776 units a year ago, according to the figures released by the Society of Indian Automobile Manufacturers.
Among the lot, however, Hero Honda Motors is likely to race ahead in margins compared to peers.
According to Angel Stock Broking, Hero Honda is expected to see 33.3 per cent rise in net profit for the quarter ended June while Bajaj Auto and TVS Motors are likely to see a decline of 12.8 per cent and 17.5 per cent, respectively.
Another analyst said, Hero Honda has got marginal debt on their books, hence its margins are less likely to get impacted because of rise in borrowing cost. However, on the industry, the analyst said, ���2009 will be full of ups and down for auto companies due to high raw material cost and interest rates.���
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Prabhudas Lilladher expects Hero Honda to continue to outperform the industry. The brokerage expects the company to post 14 per cent topline growth for April-June. Margins are expected to improve by 74 basis points year on year over a lower base quarter and net profit growth of 20 per cent.
Jajoo of Angel Stock Broking is also positive on Hero Honda but not so on the industry.
���From long-term perspective, we are cautious on two-wheelers as growth visibility is not there. Volumes are likely to go down even further in next two-three months,��� Jajoo added.
At 12:16 pm, shares of Hero Honda were down 2.06 per cent to Rs 692.50 while BSE Auto Index was down 1.11 per cent to 3,566.03.
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