World’s largest two-wheeler manufacturer Hero Motocorp ‘s second quarter profit beat analysts’ expectations on Wednesday, growing 27.7 percent year-on-year to Rs 1,004.2 crore, the highest ever in a quarter, on strong operational performance and volume growth.
Revenue during the quarter increased 15 percent to Rs 8,448.7 crore compared with year-ago period, driven by highest ever sales volume.
Hero Motocorp sold 18.23 lakh units in Q2, higher by 15.8 percent over 15.74 lakh units sold in year-ago period due to strong demand for new scooter models and inventory build up ahead of festive season.
“The highest ever volume sales during the quarter is a reiteration of the overwhelming customer preference of our products,” Pawan Munjal, CMD & CEO said.
The domestic market has seen a revival in the past two quarters due to an above-average monsoon and positive consumer sentiment. The trend is expected to continue through the year and likely to result in double-digit growth for the industry, he believes.
However, realisations during the quarter declined 1.1 percent to Rs 42,750 per unit from Rs 43,240 per unit on yearly basis.
Profit was estimated at Rs 932 crore on revenue of Rs 7,838 crore for the quarter and EBITDA expected at Rs 1,309 crore with margin at 16.7 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 25 percent year-on-year to Rs 1,368.9 crore while margin expanded by 129 basis points to 16.2 percent in Q2, aided by softer commodities & cost control measures.
Other income increased 36.7 percent to Rs 152.4 crore compared with year-ago period.