The country’s largest two-wheeler maker Hero Motocorp is expected to report a modest 2 percent year-on-year (YoY) rise in sales and 3 percent YoY fall in net profit for the October-December 2022 quarter.
The company will report its numbers on February 7.
According to a poll of brokerages conducted by Moneycontrol, standalone revenue from operations for Q3 will come in at Rs 8,033 crore, down 11.5 percent sequentially. Standalone profit after tax (PAT) is seen at Rs 667 crore, down by 6.8 percent from a quarter ago.
Analysts believe the muted performance will largely be on the back of weak demand. “Strong festive demand could not be sustained later, resulting in a ~4 percent YoY decline in volumes during Q3 FY23,” noted analysts at Motilal Oswal Financial Services.
Totaling the monthly sales data, volumes for the quarter stood at 12.4 lakh units versus 12.92 lakh units in the year-ago period and 14.28 lakh units in the quarter-ago period.
The weak trend continued into January 2023 as well. “The company expects demand to build up in the marriage season in the latter part of the month, post the commencement of the auspicious period,” Hero MotoCorp said in a statement.
Meanwhile, EBITDA (earnings before interest, taxes, depreciation and amortization) margins are set to improve by 60 basis points sequentially but decline by 20-30 basis points YoY. This is because correction in steel and aluminum prices will be offset by higher advertising spends, said analysts at Kotak Institutional Equities.
The one positive development could come on the ASP front. ASP or average selling price is expected to improve by 6 percent/2 percent YoY/QoQ, believes Nirmal Bang Equities, mainly on account of price hikes taken in Q3 FY23.
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