Moneycontrol
May 01, 2018 05:40 PM IST | Source: Moneycontrol.com

Hero MotoCorp Q4 profit seen up 32% to Rs 950 cr on strong volume growth

The growth is likely to be driven by strong sales volumes.

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Hero MotoCorp, the country's largest two-wheeler maker, is likely to report profit growth of 32.4 percent year-on-year at Rs 950.3 crore for the January-March period of financial year 2017-18.

Profit in the year-ago quarter was at Rs 717.75 crore. The sequential increase in bottomline may be around 18 percent from Rs 805.43 crore in December quarter .

Revenue from operations is seen rising 19.7 percent sequentially (16.8 percent YoY) to Rs 8,744.6 crore, according to average of estimates of analysts polled by Reuters.

Revenue during the previous quarter was at Rs 7,305.49 crore and corresponding period of last fiscal at Rs 7,488.08 crore.

The growth is likely to be driven by strong sales volumes. The low base due to demonetisation may also support.

Hero sold 20,01,571 lakh units during the quarter ended March 2018, an increase of 17 percent compared to previous quarter and 23.4 percent over a year-ago period due to healthy rural sentiment.

Recovery in rural demand should drive sales growth for Hero MotoCorp going ahead, BOB Capital Markets said.

Motilal Oswal expects the realisation to be flat year-on-year as well as quarter-on-quarter at Rs 42,834 per unit.

Kotak said operating profit margin could expand by 260 basis points on operating leverage benefits while Motilal Oswal expects 290 basis points growth in margin.

Key issues to watch out for would be update on rural demand, discounts given, demand of new launches, and outlook on exports, Motilal Oswal said.

The stock during the quarter fell 6.4 percent against 5.9 percent rally in same period last year.
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