Hero MotoCorp Ltd's Q4FY19 standalone net profit declines 24.5% yoy to Rs730.3cr : In-line with Estimates

The company’s standalone revenue stood at Rs7,885cr, down 7.9% yoy but up 0.3% qoq.

Apr 27, 2019 06:04 IST India Infoline Research Team

Hero MotoCorp Ltd Q4FY19

Standalone Results Q4FY19: (Rs. in cr)

Q4FY19 YoY (%)
Revenue 7,885.0 [7.9]
EBITDA 1,069.3 [22.0]
EBITDA Margin (%) 13.6 [244]
Net Profit (adjusted) 730.3 [24.5]
***EBITDA margin change is bps

Hero MotoCorp Ltd (HMCL) reported weak set of numbers, in-line with consensus estimates. The company's standalone revenue in the quarter declined by 7.9% yoy at Rs7,885cr on account of 11% decline in two wheelers sales volume. Decline in sales and higher raw material and employee costs, led to EBITDA decline of 22% yoy to Rs1,069.3cr with EBITDA margin contraction of 244bps yoy to 13.6%. PAT declined by a similar quantum, down 24.5% yoy to Rs730.3cr, in-line with expectations.
  • Company reported 11% yoy volume decline for the quarter amidst a sluggish market scenario in several geographies. Number of 2W sold stood at 17,81,160 units for Q4FY19.  The realisation was up 3.5% yoy to Rs44,269/unit.
  • During FY19, company forayed into two new product segments, in the premium motorcycle space with Xtreme 200R' and in the 125cc scooter category with 'Destini 125. The company aims at aggressive market share gains in these categories, going forward.
  • Further, company has indicated that the near-term prospect of the domestic two-wheeler market is likely to remain challenging. However, it expects the festive season to brighten the sentiment and revive the growth in H2FY20E. Also, FY20E is expected to be yet another challenging year in view of the upcoming stringent emission norms of BS VI.
  • Company is gearing up to launch its range of BS VI-compliant motorcycles and scooters well before the given timeline.
  • Company recommended final dividend of Rs32 per equity share of Rs2 each, subject to approval.

Technical View:

Hero MotoCorp Ltd ended at Rs. 2,604.15, down by 13.3 points or 0.51% from its previous closing of Rs. 2,617.45 on the BSE.
The scrip opened at Rs. 2,610 and touched a high and low of Rs. 2,616.50 and Rs. 2,577 respectively. A total of 7,71,238 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.

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