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Shares of Hero MotoCorp (HMCL) were trading lower by 3% at Rs 2,280 on the NSE in an otherwise firm market after the company reported a 14% year-on-year (yoy) decline in net profit at Rs 477 crore for the quarter ended March, 2015 (Q4) on account of an impairment charge of Rs 155 crore. The two-wheeler manufacturer had posted a profit of Rs 554 crore in the year-ago quarter.
Analysts on an average had expected profit of Rs 631 crore for the quarter.
Net sales grew 3.7% at Rs 6,695 crore on a y-o-y basis. EBITDA (earnings before interest, taxes, depreciation and amortization) declined by nearly 140 basis points to 12.34% from 13.73%.
“The sector has remained sluggish due to the slowing rural economy on poor crop realisation and moderating wages in the rural markets. Near to medium term, we remain cautiously optimistic. An overall improvement in the economy and positive market sentiments are required”, Pawan Munjal, vice-chairman and chief executive and managing director said.
Meanwhile, Angel Broking has downgraded its recommendation on the stock from “Buy” to “Accumulate” with a revised price target of Rs 2,655.
“HMCL volumes are likely to remain muted in the near term on the back of weak rural sentiments, due to crop damage and lower mandi prices. Also, the forecasts of a sub normal monsoon (by IMD) in FY2016 may pose further risks to growth assumptions. Given the lackluster volume growth coupled with margin pressures, we downgrade our target P/E multiple from 17x earlier to 16x,” the broking firm said in a client note.
The stock opened at Rs 2,309 and hit a low of Rs 2,255 on the NSE. A combined 425,011 shares changed hands on the counter till 1036 hours on the NSE and BSE.
Analysts on an average had expected profit of Rs 631 crore for the quarter.
Net sales grew 3.7% at Rs 6,695 crore on a y-o-y basis. EBITDA (earnings before interest, taxes, depreciation and amortization) declined by nearly 140 basis points to 12.34% from 13.73%.
“The sector has remained sluggish due to the slowing rural economy on poor crop realisation and moderating wages in the rural markets. Near to medium term, we remain cautiously optimistic. An overall improvement in the economy and positive market sentiments are required”, Pawan Munjal, vice-chairman and chief executive and managing director said.
Meanwhile, Angel Broking has downgraded its recommendation on the stock from “Buy” to “Accumulate” with a revised price target of Rs 2,655.
“HMCL volumes are likely to remain muted in the near term on the back of weak rural sentiments, due to crop damage and lower mandi prices. Also, the forecasts of a sub normal monsoon (by IMD) in FY2016 may pose further risks to growth assumptions. Given the lackluster volume growth coupled with margin pressures, we downgrade our target P/E multiple from 17x earlier to 16x,” the broking firm said in a client note.
The stock opened at Rs 2,309 and hit a low of Rs 2,255 on the NSE. A combined 425,011 shares changed hands on the counter till 1036 hours on the NSE and BSE.
