Hero MotoCorp Bottomline glitters despite of weak revenue

Hero MotoCorp (HMCL) declared its Q2FY16 results. The company's total income decreased by 1.13 per cent to Rs 6837 crore in Q2FY16 as compared to the same period in the previous fiscal year. Its total expenditure declined by 3.79 per cent to Rs 5754 crore in Q2FY16 on yearly basis. HMCL's total expenditure reduced mainly because of a 7.5 per cent reduction in raw material prices during the quarter.

HMCL's EBITDA increased by 15.9 per cent to Rs 1083 crore in Q2FY16 as compared to the same period in the previous financial year. The company's EBITDA margin expanded by 233 basis points to 15.85 per cent in Q2FY16 on yearly basis because of lower raw material cost. Its EBIT increased by 13.32 per cent to Rs 974 crore in Q2FY16 on yearly basis though its depreciation expense increased by 45.48 per cent to Rs 109 crore during the quarter. HMCL's PAT increased to Rs 772 crore with of growth just 1.14 per cent in Q2FY16 on yearly basis as other income decreased by 46.98 per cent to Rs 103 crore. The company's PAT margin expanded by 25 basis points to 11.29 per cent in Q2FY16 as compared to same period in previous fiscal year.

HMCL's first global manufacturing facility at Columbia became operational during the quarter. The company invested around USD 70 million in its global manufacturing facility. It will produce 80000 units of two-wheelers and which will go up to 1.5 lakh units in second phase of expansion. HMCL also unveiled its 2 new scooters developed through in house technology viz. Maestro Edge and Duet during the quarter.

HMCL's shareholding pattern indicates that FII holdings contracted by 24 basis points to 38.21 per cent and its DII holdings expanded by 35 basis points to 13.79 per cent during September 2015 quarter. The share price of the company also increased by 2.3 per cent on BSE in early trades and is trading at Rs 2630.5 on intraday basis.

HMCL formerly Hero Honda Motors is an India based two wheeler 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's extensive sales and service network now spans over 6000 customer touch points.