Hero MotoCorp hits 33-mth high, soars 15% in 9 days on record festive sales

Last week the company said it recorded highest-ever festive sales, clocking more than 1.4 million units in retail sales during the 32-day festive period.

Shares of Hero MotoCorp hit a 33-month high of Rs 3,551.75, as they surged 4 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market, on expectation of strong growth momentum going forward.

The stock was quoting higher for the 9th straight trading day and rallied 15 per cent during the same period. It was trading at its highest level since February 2021. In comparison, the S&P BSE Sensex was up 0.06 per cent at 66,065 at 01:18 PM.

Hero MotoCorp, the world's largest manufacturer of motorcycles and scooters, with a market capitalisation of Rs 70,960 crore, re-entered in to the list of top 100 most valuable BSE listed companies, data shows.

Hero MotoCorp, last week said that the company recorded its highest-ever festive sales, clocking more than 1.4 million units in retail sales during the 32-day festive period - between the first day of the Navratras and Bhai Dooj – this year.

Riding on robust demand across rural markets as well as steady retail off-take in key urban centers, the company said it registered a 19 per cent growth over the previous year, and surpassed its previous highest retail sales of 1.27 million units which was recorded in the festive period of 2019.

The management said the record retail number was achieved due to the strong customer traction across markets, with good double-digit growth in the Central, North, South and East Zones. The robust customer demand in the rural markets, in addition to the very positive sentiments in key urban centers, drove this record retail sales.

With this robust retail sales, the company’s post-festive channel inventory has now come down to its lowest level in more than three years. This has set us on a steady growth path for the rest of the fiscal year, the management said.

Meanwhile, since November 1, the stock price of the company has continued its upward movement after the company reported its financial performance for the second quarter (July-September 2023) of the FY 2024.

The overall revenue from operations for the quarter grew by 4.1 per cent, and earnings before interest, tax, depreciation, and amortisation (Ebitda) margins at 14.1 per cent improved by 260 bps over the corresponding quarter previous year, aided by commodity cost, leap savings, and product mix. Profit after tax jumped 47 per cent YoY to Rs 1,054 crore.

A healthy festive demand across most categories and specifically in the auto sector has demonstrated the underlying propensity of the robustness of the market. The consumer confidence is coming back, which augurs well for the growth momentum moving forward, the management of Hero MotoCorp said.

The premium range of products which have been launched across all key models have been received by the customers very well. The company’s strong margin shape will help the company even more in deploying necessary fuel behind growth priorities, the management said, adding that, the medium term outlook for India in general and auto industry in particular appears quite encouraging.