Hero Motocorp Q1 net may dip 11% at Rs 545cr: P Lilladher

Prabhudas Lilladher has come out with its first quarter (April-June) earnings estimates for automobiles sector. The brokerage house expects Hero Motocorp to report a 5 percent degrowth quarter-on-quarter (down 11.4 percent year-on-year) in net profit at Rs 545.5 crore.

Revenues are expected to increase by 2.6 percent Q-o-Q (up 0.9 percent Y-o-Y) to Rs 6305.6 crore, according to Prabhudas Lilladher.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 3.2 percent Q-o-Q (down 6.4 percent Y-o-Y) to Rs 876.6 crore.

Prabhudas Lilladher report on Hero Motocorp

Hero Motocorp (HMCL) reported a 5.1 percent Y-o-Y decline in volumes on account of lower retail demand and competition from HMSI. As a result, HMCL is likely to report a flat top-line.

EBITDA margins are expected to contract by 110bps on account of higher advertisement spend and lower volumes.

Tax rate is likely to increase to 22.5 percent v/s 16.3 percent Y-o-Y, thereby, resulting in a PAT decline of 11.4 percent Y-o-Y.