Q3FY24 Preview: Hero Motocorp: Revenue seen at ₹97,835 Million, PAT at ₹10,572 Million

8 Feb 2024 , 11:02 AM

Result date: February 9, 2024

Recommendation: Add

Target price: ₹4,300

Hero Motocorp witnessed 18% growth in its sales volumes over the year-ago quarter (good festive in 2023, de-stocking in 2022) and 3% growth on a sequential basis. Analysts at IIFL Capital Services expect the company’s revenue to grow 22% over the year-ago quarter and 4% sequentially.

The company’s EBITDA margin could witness a contraction of 29 basis points sequentially, amid higher marketing spends due to the festive season. Sequential margin tailwinds include better operating leverage and fall in prices of precious metals. Over the year ago quarter, EBITDA margin could expand 226 basis points.

Profit After Tax or PAT could grow 49% over the year-ago quarter, but remain flat on a sequential basis.

Important management insights to watch out for:

• Demand trends across segments, markets
• Outlook on pricing, margins

₹ Million	December 2023 estimates	YoY change	QoQ change
Volumes	1,459,932	17.8%	3.1%
Revenue	97,835	21.8%	3.6%
EBITDA	13,472	45.8%	1.4%
EBITDA margin	13.8%	226 bps	(29) bps
Profit After Tax	10,572	48.7%	0.3%

Source: IIFL Research