Honda India Power hits new high, zooms 45% in 1 month on strong Q2 results

In Q2FY23, the company's profit after tax jumped 167 per cent year-on-year at Rs 42.42 crore on the back of healthy operational income

Shares of Honda India Power Products hit a new high of Rs 2,357.05, ralling 9 per cent on the BSE in Friday's intra-day trade. In comparison, the S&P BSE Sensex was down 0.26 per cent at 61,588 at 10:13 AM.

In the past one month, the stock of the industrial equipments company has zoomed 45 per cent after it reported robust earnings for the quarter ended September 2022 (Q2FY23), as against 4.5 per cent rise in the Sensex.

In Q2FY23, the company's profit after tax (PAT) jumped 167 per cent year-on-year (YoY) at Rs 42.42 crore on the back of healthy operational income. It had posted PAT of Rs 15.90 crore in Q2FY22, and Rs 4.91 crore in the previous quarter (Q1FY23).

Revenue from operations during the quarter grew 70.5 per cent YoY and 97 per cent sequentially at Rs 394 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 564 bps YoY at 14.29 per cent. Ebitda margin stood at 2.82 per cent in Q1FY23.

Honda India Power Products is primarily engaged in manufacturing and marketing of portable gensets, water pumps, general purpose engines, lawn mowers, brush cutters, and tillers. The company caters to both domestic and international markets.
State and Union Government continue to allocate and provide support towards agriculture and infrastructure sectors as expected albeit with changes in composition, disbursement and attributes.

Farm output improvement programs and investments all across, led by increased level of mechanization, shift towards horticulture and oil seeds are all leading indicators of better farm incomes and this sector’s returns on investments was encouraging at all levels.

"Construction mechanization, through portable engines run applications and Farm mechanization products such as engines, water pumps, riding on increasing rural incomes, expected continuity in Government support, together with high cost and scarcity of manual labour, will provide much needed demand for our product portfolio and offerings," the management said.

The company is pursuing development of multi-channel structure supporting Original Equipment Manufacturers (OEMs) in the country across various segments to develop application related products and equipment. Tying up with such small, medium and specialized quality manufacturers is expected to build another much needed ecosystem of cost competitive and application specific products and services, the management added.