Q2FY24 Preview: Hero MotoCorp: Revenue seen at Rs. 92,736 million, PAT at Rs. 9,971 million

30 Oct 2023 , 11:54 AM

Result date: November 1, 2023

Recommendation: Add

Target price: Rs. 3,225

Hero MotoCorp posted flattish volumes as compared to the year-ago quarter and 5% growth on a sequential basis. Analysts at IIFL Capital Services expect the company’s revenue to grow 2% over the year-ago quarter and 6% sequentially.

The company’s EBITDA margin could witness expansion of 283 basis points over the year-ago quarter and 52 basis points sequentially. Healthy operating leverage, low marketing spends (seasonal) and fall in cost of precious metals are key margin tailwinds during the quarter.

Profit After Tax (PAT) could grow 39% over the year-ago quarter and 1% sequentially.

Important management insights to watch out for:

• Demand trends across markets
• Timeline of new product launches
• Margin drivers going forward

	September 2023 estimates	YoY change	QoQ change
Volumes	1,416,524	(0.8)%	4.7%
Revenue (Rs. mn)	92,736	2.2%	5.8%
EBITDA (Rs. mn)	13,238	27.5%	9.7%
EBITDA margin (%)	14.3%	283 bps	52 bps
Profit After Tax (Rs. mn)	9,971	39.2%	1.3%

Source: IIFL Research