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Hero MotoCorp Q3 preview: Profit may grow around 10% on strong revenue growth

Kotak expects EBITDA to increase by 24 percent YoY led by operating leverage benefits in Q3FY21, but expects EBITDA margin to decline by 156 bps YoY.

February 04, 2021 / 08:14 AM IST
 
 
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Two-wheeler major Hero MotoCorp on February 4 is expected to report around 10 percent year-on-year growth in profit for the quarter ended December 2020 driven by revenue growth and strong operating income.

Brokerages see a whopping year-on-year growth of around 38 percent in revenue driven by strong volume growth and average selling prices, while EBITDA could grow around 24 percent YoY, but operating profit margin may get hit by higher commodity prices and adverse currency movement.

"We expect revenues to increase by 38 percent YoY in Q3FY21 led by 20 percent YoY increase in volumes and 14 percent YoY increase in average selling prices due to BS-VI transition and a richer mix (higher mix of premium motorcycle and scooter segments)," said Kotak Institutional Equities which sees profit growth of around 11 percent YoY.

Sharekhan also expects Hero MotoCorp to register revenue growth of 37.7 percent YoY, aided by same reasons. The average realisation is likely to improve back of price hikes taken by the company due to BS-VI transition and better product mix, said the brokerage.

Kotak expects EBITDA to increase by 24 percent YoY led by operating leverage benefits in Q3FY21, but expects EBITDA margin to decline by 156 bps YoY.
Moneycontrol News
first published: Feb 4, 2021 08:14 am

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