Hero MotoCorp Q2 preview: Net profit may surge up to 11%, revenue by 9% YoY

Hero MotoCorp Q2 preview: The world’s largest two-wheeler manufacturer, Hero MotoCorp, will announce its September quarter of financial year 2025 (Q2FY25) results on Thursday, November 14, 2024. 

 

Domestic brokerages expect Hero MotoCorp to show strong year-on-year (Y-o-Y) growth in revenue and profitability, driven by volume increases, improved realisations, and a favourable product mix. 

 

Nuvama Institutional Equities, Motilal Oswal, Kotak Institutional Equities, and Elara Capital all project Y-o-Y revenue growth between 7-9 per cent, supported by gains in premium segment volumes, specifically the 125CC bikes. Ebitda margins are also expected to rise or remain stable due to effective pricing strategies and cost management. While revenue forecasts range around Rs 10,132.5 to Rs 10,274.2 crore, PAT is expected to grow by up to 10.7 per cent, highlighting positive performance despite a cautious demand outlook.

 

 

Additionally, Hero MotoCorp recorded a stellar festive show, posting a 17.4 per cent Y-o-Y increase in domestic sales. The company sold 657,403 units this October, boosted by its ‘Grand Indian Festival of Trust’ campaign.

 

On the bourses, Hero MotoCorp shares have fallen over 3 per cent in the past six months, though the company has seen about 15 per cent increase year-to-date (YTD). On Tuesday, November 12, the scrip settled 0.80 per cent lower at Rs 4,718.10 per share. In comparison, BSE Sensex finished 1.03 per cent lower to 78,675.18 levels.

 

Given this, here’s a look at what brokerages expect from Hero MotoCorp in Q2FY25:

 

Nuvama Institutional Equities 

Analysts at Nuvama Institutional Equities expect Hero MotoCorp's revenue growth to be bolstered by both a rise in volume and an increase in realisations. Additionally, analysts foresee an improvement in Ebitda margins due to better net pricing, though the demand outlook will be a critical factor to watch. 

 

Thus, Nuvama estimates Hero MotoCorp’s revenue at Rs 10,132.5 crore, reflecting a 7 per cent increase year-over-year (Y-o-Y). Analysts also project Ebitda at Rs 1,458.9 crore, up 10 per cent Y-o-Y, and adjusted profit after tax (PAT) at Rs 1,145.5 crore, a 9 per cent rise Y-o-Y.

 

Motilal Oswal   

According to Motilal Oswal, Hero MotoCorp’s volumes grew by approximately 7 per cent Y-o-Y, partially due to a low base from the previous year. Analysts predict an 8 per cent Y-o-Y growth in revenue for Q2FY25, with an improved product mix driven by the 125CC segment contributing to this performance. Margins, analysts believe, are expected to remain stable quarter-over-quarter (Q-o-Q) given steady input costs and product mix. 

 

Consequently, Motilal Oswal anticipates Hero MotoCorp's revenue at Rs 10,242.3 crore, marking an 8.4 per cent Y-o-Y increase, Ebitda at Rs 1,467.8 crore (up 10.5 per cent Y-o-Y), and net profit at Rs 1,126.7 crore, up 6.9 per cent Y-o-Y.

 

Kotak Institutional Equities   

Analysts at Kotak Institutional Equities predict a 9 per cent Y-o-Y revenue growth for Hero MotoCorp in Q2FY25. This forecast is based on a 7-8 per cent increase in volumes, supported by ramped-up sales of the Xtreme 125, and a 1-2 per cent rise in average selling prices (ASPs) due to a richer product mix. Kotak Institutional Equities expects a 40-basis-point improvement in Ebitda margins Q-o-Q, driven by commodity tailwinds and reduced advertising expenditure.

 

Accordingly, analysts at Kotak Institutional Equities forecast revenue at Rs 10,274.2 crore (up 8.8 per cent Y-o-Y), Ebitda at Rs 1,524.4 crore (up 14.8 per cent Y-o-Y), and adjusted PAT at Rs 1,166.2 crore, a 10.7 per cent Y-o-Y increase.

 

Elara Capital   

Elara Capital analysts expect Q2FY25 revenue for their OEM universe (excluding Tata Motors) to rise 6 per cent Y-o-Y and 4 per cent Q-o-Q. For two-wheelers (2W), analysts forecast production to grow 8 per cent Q-o-Q and 13 per cent Y-o-Y. 

 

Considering these trends, Elara Capital anticipates Hero MotoCorp’s revenue at Rs 10,192.1 crore, an increase of 7.9 per cent Y-o-Y, Ebitda at Rs 1,508.4 crore, up 13.6 per cent Y-o-Y, and PAT at Rs 1,135.1 crore, a 7.7 per cent increase Y-o-Y.