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Last Updated : Aug 14, 2020 10:14 AM IST | Source: Moneycontrol.com

Hero MotoCorp shares trade lower after Q1 profit dips 95%

Morgan Stanley has retained 'underweight' rating on the stock with a target of Rs 2,000 per share.

 
 
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Hero MotoCorp share price was down over a percent in the morning trade on August 14, a day after the company declared its June quarter numbers.

The country’s largest two-wheeler maker reported a 95 percent decline in standalone net profit at Rs 61.31 crore for the quarter ended June 30, 2020 amid COVID-19 induced lockdown. It reported a net profit of Rs 1,257.34 crore in the corresponding period of the last financial year.

Revenue from operations in the quarter gone by stood at Rs 2971.54 crore, a 63 percent fall compared to Rs 8030.27 crore registered in the year-ago period. Total expenses during the period were Rs 3040.51 crore, a decline of 57 percent over Rs 7,112.75 crore reported in the first quarter of the last financial year.

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Hero MotoCorp reported a 3.97 percent dip in sales to 5,14,509 units in July compared to the same month of the previous year. The company sold 5,35,810 vehicles in July 2019.

Despite the prevailing economic slowdown, the company registered a sequential growth of 14 percent over June and reached more than 95 percent of wholesale dispatch numbers of the corresponding month in the previous year, the two-wheeler major said.

"The robust volumes have been driven by strong retail sales due to the positive market demand," it added.

While there is cautious optimism on the demand trajectory, sales continue to be impacted by the micro-lockdowns in several parts of the country, Hero MotoCorp said.

Research firm Morgan Stanley has maintained its 'underweight' rating on the stock with a target of Rs 2,000 per share. It is of the view that better cost management led to margin beat, with the company posting a 3.6 percent margin against estimates of -2 percent, according to a CNBC-TV18 report.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Aug 14, 2020 10:14 am
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