Hero MotoCorp is likely to report that standalone profit after tax in the first quarter doubled from a year earlier and grew 20 percent from the previous quarter, according to a poll of brokerages.
Standalone revenue is expected to jump 58 percent year-on-year and increase 16 percent from the previous quarter.
The world’s largest two-wheeler manufacturer in terms of units manufactured is expected to report standalone PAT of Rs 748 crore on revenue of Rs 8,645 crore, according to the average of estimates of six brokerages polled by Moneycontrol.
Higher volumes and a marginal increase in prices may help the company achieve sequential growth in its top and bottom lines. Hero MotoCorp is scheduled to release its results on August 12.
The Gurgaon-based company’s PAT was Rs 365 crore during the corresponding period of the previous year while registering revenue of Rs 5,487 crore. During the January-March quarter, the company’s PAT increased to Rs 627 crore while its revenue stood at Rs 7,421 crore.
Two-wheeler volumes for the quarter stood at 1.4 million units, a year-on-year growth of 36 percent and an increase of 17 percent on quarter.
“Two-wheeler volumes increased ~17 percent QoQ and 36 percent on year, mainly due to demand revival in rural markets,” Equirus Capital said in a report.
While domestic volumes increased 20 percent on quarter and 41 percent YoY, export volumes fell 25 percent QoQ and 26 percent compared to the prior year period.
“Thus we expect revenue to increase by ~15 percent on a sequential basis and by 55 percent from last year as we expect realisations to increase 1 percent on quarter and by 14 percent year on year,” Equirus said.
Also, inventory correction was largely achieved during the January-March period, which aided the recovery in volumes.
Experts expect Hero MotoCorp’s EBITDA (earnings before interest, tax, depreciation and amortisation) margin to increase by 50 basis points QoQ, led by operating leverage benefit and offset by a lower mix of spares segment and raw material headwinds.
The key factor to watch out for would be the outlook on margins and volumes.
Hero MotoCorp shares gained Rs 9.85 to Rs 2,785.30 at the close on the National Stock Exchange on August 11, little changed from the price a year ago.
Disclaimer: The views and investment tips of investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
