 "Hero MotoCorp")
The consolidated net profit of Hero MotoCorp, India’s top two-wheeler manufacturer, increased by 47.6 per cent year-on-year (y-o-y) to Rs 1,007 crore in the September quarter due to financial discipline, reduced commodity costs, and multiple product launches in the premium segment.
The company reported that in the second quarter of the current financial year, consolidated total revenue amounted to Rs 9,741.17 crore, an increase from Rs 9,252.22 crore during the same period in the previous year. Regarding sales volume, the company recorded 14.16 lakh units of motorcycles and scooters sold during the quarter.
Its total expenses were higher, reaching Rs 8,385.5 crore, compared to Rs 8,292.25 crore in the corresponding quarter of the preceding financial year.
Hero MotoCorp’s CEO, Niranjan Gupta, noted the robustness of the market, driven by healthy festival demand across various categories and especially in the auto sector. He expressed optimism about the return of consumer confidence, which bodes well for future growth momentum.
Gupta emphasised the company’s commitment to financial discipline and prudent capital allocation while introducing premium products across their key models. The positive reception of their premium range products by customers is expected to further enhance the company's margins and support growth initiatives, he noted.
Looking ahead, Gupta acknowledged the presence of global macroeconomic uncertainties but expressed optimism about the medium-term outlook for India and the auto industry.
Hero MotoCorp also said that earlier this year, Pawan Munjal decided to separate the roles of the Chairman and CEO and appoint a CEO for the company. “Following this transition, he has now volunteered to reduce his fixed salary by 20 per cent. The same was approved by the Board of Directors at its meeting today following the recommendations of the Nomination and Remuneration Committee. The updated remuneration of the Executive Chairman will be effective January 1, 2024,” he added.
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During FY23, Hero MotoCorp paid Pawan Munjal a total remuneration of Rs 99.55 crore, marking an 18.02 per cent increase from the previous year. However, after applying the aforementioned 20 per cent reduction, the remuneration is expected to be around Rs 80 crore.
According to Dhruv Mudaraddi, research analyst at StoxBox, Hero MotoCorp exceeded market expectations on all fronts by posting a healthy set of numbers in Q2 of FY24.
“As expected, the company’s Ebitda (earnings before interest, taxes, depreciation, and amortization) margin showed healthy expansion annually, owing to better operational leverage, higher realisations due to product mix, and a decline in the price of precious metals. The moderation in raw material prices also led to PAT (profit after tax growth of 47% Y-o-Y which reflects the company’s financial discipline as they continue the premiumization of their portfolio,” he noted.
"Strong traction for the company’s newest models like the Harley-Davidson X440, Karizma XMR and Xtreme 160R 4V augurs well for future growth. The management commentary on discounts in the festive period, demand in its EV segment and revival in the entry-level bike segment will be crucial going forward," he added.
