Q4FY23 Preview: Hero Motocorp: Revenue seen at Rs 82,064 million, PAT at Rs 7,300 million

2 May 2023 , 03:21 PM

Result date: 4^th May, 2023

Recommendation: Add

Target price: Rs 2,770

Hero Motocorp witnessed sales volume growth of 7% over the year-ago quarter and 3% on a sequential basis. Healthy demand recovery in urban areas along with strong demand during Navratri and channel filling ahead of BS6-II norms were prominent drivers of this growth. The company’s revenue could grow ~11% over the year-ago quarter.

Lower marketing costs, price hikes as well as healthy operating leverage should aid EBITDA margin during the quarter.

Hero Motocorp could post 16% growth in its Profit After Tax or PAT during the quarter.

Important management insights to watch out for:

• Demand trends across markets 
• Drivers of margins
• Outlook on input costs and pricing action

	March 2023 estimates	YoY change	QoQ change
Volumes	1,270,492	6.9%	2.5%
Revenue (Rs Million)	82,064	10.6%	2.2%
EBITDA (Rs Million)	9,722	17.5%	5.2%
EBITDA Margin	11.8%	70 bps	34 bps
Profit After Tax	7,300	16.4%	2.7%

Source: IIFL Research