Hero MotoCorp skid after Q2 PAT drops 10% YoY to Rs 716 cr

Hero MotoCorp shed 1.96% to Rs 2,594.25 after the two-wheeler major's standalone net profit declined 9.9% to Rs 716.07 crore despite of 7.4% rise in revenue from operations to Rs 9,075.35 crore in Q2 FY23 over Q2 FY22.

The company's profit before tax stood at 963.66 crore in quarter ended 30 September 2022, declining 8.5% from Rs 1,052.88 crore posted in the same period last year.

Total expenses rose 8.55% year on year to Rs 8,203.74 crore in Q2 FY23. Cost of materials consumed was at Rs 6,516.65 crore (up 7.36% YoY) and employee expenses stood at Rs 549.01 crore (up 8.62% YoY).

Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) for the quarter stood at Rs 1,038 crore.

The company sold 14.28 lakh units of motorcycles and scooters in quarter ended 30 September 2022.

Niranjan Gupta, chief financial officer (CFO), Hero MotoCorp, said The Indian economy has continued to outperform the global growth supported by its relatively stronger fundamentals, and the return of its strong domestic consumption since the re‐opening of all the sectors post covid. A healthy festive period demand across most categories and specifically in auto sector have demonstrated that the underlying propensity to spend has gone up. The consumer confidence is coming back, which augurs well for growth momentum moving forward.

Our results reflect our continued financial discipline, focus on cost savings and capital allocation on one hand, while ensuring premiumisation of our portfolio on the other. The X tec Variants which have been launched across all key models have been received by the customers very well. We will continue to build presence in premium segment through multiple launches over next few quarters, he stated.

Gupta further added, The global macro headwinds may keep the playfield a bit uncertain, and navigating the same over next few quarters will be important. However, as the commodities cool off, and the rate cycle reaches its peak, the medium term outlook for the Indian auto industry appears quite encouraging.

Hero MotoCorp is the world's largest manufacturer of motorcycles and scooters.

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