Hero Grows But Doesn’t Outperform
Sagar Lele / 23 Jul 2012
Hero Motors announced their Q1FY13 results on July 19, 2012 and posted figures that displayed growth in both, the topline and the bottomline of the company. It was a tad lesser than the average analyst expectations resulting in a drop in stock prices since the announcement. Hero Motocorp is trading more than 2.57 per cent lower than pre-announcement.
In terms of sales volume, on a YoY basis the sales grew by 7.37 per cent, touching 16,42,292 vehicles in Q1FY13 as compared to 15,29,577 vehicles sold in Q1FY12. This has been the highest quarterly sales reported by Hero and it has been attributed to the fact that the highest ever monthly sales were achieved in the months of April and May 2012.
In terms of financials, the net income from operations was announced to be Rs 6,247.28 crore which is a growth of 9.95 per cent as compared to the corresponding quarter in the previous year. The operating profit and the net profit of the company grew by 13.13 per cent and 10.32 per cent respectively relative to Q4FY12.
Since the growth pattern has been in uniformity with the past performance, the operating profit margin and net profit margin didn’t see any significant changes and remained pretty much at the same levels of 15.00 per cent and 9.85 per cent respectively.
Financials For Q1FY13 And Q1FY12
|
| Q1FY13 | Q1FY12 |
|---|---|---|
| Number Of Two-Wheelers Sold | 16,42,292 | 15,29,577 |
|
| Rs Crore | |
| Net Income From Operations | 6,247.28 | 5,681.73 |
| Operating Profit | 93,686 | 82,812 |
| PPT | 734.88 | 669.57 |
| Net Profit | 615.46 | 557.89 |
Over the first three months of FY13, two-wheeler sales growth figures have been supported by the tremendous amount of growth shown by Honda Motorcycle and Scooter India (HMSI). Over all the three months the YoY monthly sales growth of HMSI has been in the range of 45.53 per cent and 52.32 per cent. Bajaj Auto and TVS Motors have shown de-growth in at least one of the months and have largely underperformed among the top four players in the industry. Hero Motors though has grown in the range of 4.26 per cent and 11.28 per cent in the three months and has been consistent, if not outperforming.
Monthly Sales Volume Growth YoY
|
| % Change YOY | ||
|---|---|---|---|
| Category | Apr-12 | May-12 | Jun-12 |
| Hero Motors | 6.66 | 11.28 | 4.30 |
| Total Two-Wheelers | 10.94 | 11.17 | 9.2 |
We would be covering this company in more detail shortly and the analysis would be rolled out soon.
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