Hero Motocorp profits swells on lower input cost

Hero MotoCorp (HMCL) declared its June 2015 quarter results. The company's net sales decreased by 1.16 per cent to Rs 6955 crore in Q1FY16 as compared to the same period in the previous financial year. Its volume declined by 4.04 per cent to 1645867 units during Q1FY16. HMCL volume sales dropped by 7.98 per cent to 487580 units in month of July 2015. The company has 70 per cent market share in 75CC to 110CC and over 50 per cent market share in 125CC segments.

HMCL's total expenditure declined by 2.99 per cent to Rs 5907 crore in Q1FY16 on yearly basis. Total expenditure of the company declined predominantly due to 3.7 per cent reduction in raw material prices amounting to Rs 4869 crore during June 2015 quarter.

EBITDA of HMCL increased by 10.63 per cent to Rs 1048 crore in Q1FY16 as compared to the same period in previous fiscal year. EBITDA margin of the company expanded by 161 basis points to 15.07 per cent in Q1FY16 on yearly basis because of lower input cost. Its EBIT too rose by 44.11 per cent to Rs 945 crore in Q1FY16 on yearly basis as depreciation expense reduced by 64.68 per cent to Rs 103 crore during the quarter. HMCL's PBT increased by 36.69 per cent to Rs 1046 crore in Q1FY16 on yearly basis though its other income declined by 9.61 per cent to Rs 102 crore during the quarter. The net profit of the company increased by 33.33 per cent to Rs 750 crore in Q1FY16 compared to same period in previous fiscal year. Its net profit margin expanded by 279 basis points to 10.79 per cent in Q1FY16 on yearly basis.

HMCL launched two new products as 150CC 'Xtreme Sports' and 100CC 'Passion Pro.' The company tied up with Punjab National Bank to sell products through easy financing schemes in semi urban and rural areas of the country. It became title sponsor of the 'Hero Caribbean Premier League' for a period of one year. HMCL sold 1 lakh motorcycles and scooters on Snapdeal within a short time frame of five months.

HMCL shareholding pattern indicates that FII holdings contracted by 232 basis points to 38.45 per cent and DII holdings expanded by 254 basis points to 13.44 per cent during June 2015 quarter. The stock on BSE increased by 3.79 per cent and trading at Rs 2716.6 on intraday basis.

HMCL formerly Hero Honda Motors is an India based two wheelers manufacturer company. The Company is engaged in the manufacturing and selling of motorized two-wheelers, spare parts and related services. Its two wheelers are manufactured across three manufacturing facilities. Two of these are based at Gurgaon and Dharuhera in Haryana. The third manufacturing plant is based at Haridwar in Uttarakhand. HMCL extensive sales and service network now spans over to 6000 customer touch points.