Hero Motocorp Q3 PAT seen up 47% at Rs 631 cr

India's largest two-wheeler producer Hero Motocorp is expected to report a profit after tax of Rs 631 crore in the third quarter of FY12, a massive growth of 47% as compared to Rs 429 crore in the corresponding quarter of last fiscal.

Adjusted PAT is likely to go up by 23% to Rs 631 crore from Rs 509 crore during the same period. (In Q3FY11, the company had reported an exceptional expense of Rs 80 crore on claims arising out of litigations.)
Revenues are seen going up by 16.2% to Rs 6,000 crore in the quarter ended December FY12 versus Rs 5,161 crore in a year ago quarter. Operating profit margin is expected to be at 13.5% versus 11% YoY and 15.7% QoQ.
 
On quarter-on-quarter basis, revenues are likely to go up 2.9% and profit after tax is seen going up by 4.6%.
 
Things to watch out for :
* Hero Motocorp to see revenues growth of 16% backed by steady 12% volume ramp up (highest ever volumes for company) and 4% YoY growth in average realisations
* In comparison , Bajaj auto volume growth 13.6%, Hero Motocorp volume growth 12%, TVS Motor volume growth 1.1%
* Expect QoQ improvement in OPM despite higher advertisement spends in the quarter due to higher operating leverage and stable input prices.
* Realisations to grow 1.4% QoQ, (4% YoY) to Rs 38000/unit Vs Rs 37456/unit last quarter
* Expect to see higher advertisement spends due to brand transition (last quarter, company saw advertisement spends of Rs 45-50 crore due to brand transition)
* Expect higher royalty payout due to INR depreciation (In Q2FY12, royalty payment to Honda Motors in rupee terms increased to Rs 210 crore Vs Rs 177 crore in Q1FY12 due to yen appreciation)
 
Volume growth in Q3
Total volume up 12% at 16 lakh units Vs 14.28 lakh (highest ever quarterly volumes for the company)