Hero MotoCorp Q2 net profit declines 22% to Rs 748 cr; revenue falls 10%

The firm said its electric vehicle (EV) project is in the advanced stages

Two-wheeler market leader Hero MotoCorp on Friday reported a 22 per cent decline in consolidated net profit to Rs 747.79 crore in the second quarter ended on September 30, 2021, impacted by lower sales.

The company, which posted a consolidated net profit of Rs 963.82 crore in the same period last fiscal, said its electric vehicle project is in advanced stages and is gearing up to launch the first product by March 2022.

Consolidated revenue from operations was at Rs 8,538.85 crore as against Rs 9,473.32 crore in the year-ago quarter, Hero MotoCorp said in a regulatory filing.

The company sold 14.38 lakh units of motorcycles and scooters in Q2 FY'22, down 21 per cent from 18.22 lakh units sold in the same period last fiscal.

Total expenses stood at Rs 7,640.71 crore in the second quarter this fiscal, down from Rs 8,359.23 crore in the corresponding period a year ago.

Cost of materials consumed were also lower at Rs 6,091.07 crore as against Rs 6,692.38 crore in the year-ago period.

Commenting on the quarterly performance, Hero MotoCorp Chief Financial Officer Niranjan Gupta said, "Commodity prices, which have been impacting the industry margins so far, are showing some signs of softening as we move from here. Through accelerated Leap-II savings programme, overheads management, and judicious price increases, we have been able to improve our margins sequentially and expect further recovery moving forward."

On the outlook, he said Hero MotoCorp expects a build-up in demand over the coming quarters as the economy continues to show recovery and improvement.

"Positive economic signs, encouraging farm activities and increased need for personal mobility is likely to restart the momentum in the two-wheeler industry and we expect positive sentiments both in the rural and semi-urban markets," Gupta added.

Stating that its electric vehicle (EV) project is in the advanced stages, the company said it is gearing up to launch the EV by March 2022.

The product will be manufactured at Hero MotoCorp's plant at Chittoor, in Andhra Pradesh. The facility will provide an integrated ecosystem for battery pack manufacturing and testing, vehicle assembly and vehicle end of line testing (EOL), it added.