Hero Honda Q1 PAT seen up 10.5% at Rs 543 cr

India's largest two-wheeler manufacturer Hero Honda is expected to report 10.5% rise in its first quarter FY12 profit after tax to Rs 543 crore against Rs 491 crore in the year ago period. 

Revenues are seen going up by 32% to Rs 5,660 crore from Rs 4,296 crore year-on-year. However, operating profit margin is expected to be at 12% - lower as compared to 14% in Q1FY11. What to watch out for :
* Within the 2 wheeler space, Hero Honda to record the strongest sales growth driven by volumes (up 24% YoY while Bajaj Auto went up 18% YoY and TVS up 16% YoY )
* Hero Honda will be back in the PAT growth trajectory after 4 successive quarters of de-growth
* Realizations should improve by 7% YoY (0.6% QoQ ) on account of price increases of Rs 500-1000/unit taken at beginning of March - 2011
* Hero Honda has once again raised prices by Rs 500-600/unit in June 2011, full benefit to be seen next quarter.  Expect commentary on : * Post its split with Honda, Hero Honda needs to address challenges related to new product development, brand transition, developing export markets and maintaining market share. * It needs to build its fourth plant to meet strong demand and maintain its market share
 
Volume growth Total volume went up 24% to 15.29 lakh units in Q1 against 12.34 lakh in Q1FY11. FY11 total volume jumped 33% to 54 lakh units from 46 lakh in FY10.