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Hero MotoCorp gains as Q1 profit beats forecast

The stock has rallied nearly 4% at Rs 2,800 on the BSE in early morning trades.

SI Reporter Mumbai
Last Updated : Aug 04 2015 | 9:32 AM IST
Shares of Hero MotoCorp have rallied nearly 4% at Rs 2,800 on the BSE in early morning trades after the company reported a better than expected 33% year-on-year (YoY) jump in net profit at Rs 750 crore for the first quarter ended June 30, 2015 (Q1). The company had posted a profit of Rs 563 crore in the same quarter a year earlier.

Net sales, however, declined by 2% at Rs 6,856 crore on a Y-o-Y basis, Hero MotoCorp said in statement.

The net profit is higher than an average analyst estimate of Rs 684 crore even as the revenue is down from the estimated Rs 7,063 crore.

Hero’s operating margins at 15.1% improved 160 basis points on a y-o-y basis and were ahead of analyst estimates of 13%.

The raw material costs during the quarter were lower on account of subdued commodity prices coupled with raw material cost reduction measures under the programme “Leap”. Reduction in marketing expenses due to seasonality further aided in margin improvement, said an analyst at Angel Broking in a client note.

At 09:21 am, the stock was up 2.9% at Rs 2,775 on the BSE. A combined 223,578 shares changed hands on the counter on the BSE and NSE so far.

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First Published: Aug 04 2015 | 9:26 AM IST

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