Hero Motocorp Q3 net down -30.95% yoy at Rs703.74cr on sharp fall in EBITDA margins to 12.2%

10 Feb 2022 , 11:25 PM

Hero Motocorp reported -18.46% yoy fall in total sales revenues for the Dec-21 quarter on consolidated basis at Rs8,013cr. On a sequential basis, the revenues were down by -6.06%. During the December 2021 quarter,

Hero Moto recorded volumes of 12.92 lakh units of motorcycles and scooters, sharply lower on a yoy basis on weak rural demand. Global business saw a growth of 16% yoy at 61,000 units.

Despite the pressure on the overall sales of scooters and motorcycles, the parts business did extremely well with positive growth of 15% at Rs1,186cr. During the quarter, Hero Moto invested another Rs150cr in Ather Energy taking the total investment in Ather to Rs655cr.

For the Dec-21 quarter, the operating profits were down -18.46% at Rs809cr. During the quarter, the consolidated EBITDA stood at Rs960cr while the EBITDA margins came in sharply lower at 12.2% which resulted in the weak operating performance.

The company has undertaken several cost cutting measures as well as inventory tweaking for working capital efficiency gains. The sharp spike in commodity prices in the quarter had hit most of the auto companies and Hero Moto was no exception.

The shortage of chips in the market also led to weak production numbers. Operating margins tapered from 12.90% in Dec-20 quarter to 10.09% in the Dec-21 quarter on operating profit pressures. However, the operating margins were just about 59 bps lower on a sequential basis.

Net Profit after tax (PAT) for the Dec-21 quarter was down -30.95% yoy at Rs703.74cr on the back of higher operating costs in the quarter and weak operating margins getting transmitted to the bottom line.

PAT margins tapered from 10.37% in the Dec-20 quarter to 8.78% in the Dec-21 quarter. The PAT margins were higher by 5 bps on a sequential basis.

Financial highlights for Dec-21 compared yoy and sequentially

	Hero Motocorp
Rs in Crore	Dec-21	Dec-20	YOY	Sep-21	QOQ
Total Income (Rs cr)	₹ 8,013.08	₹ 9,827.05	-18.46%	₹ 8,538.85	-6.16%
Operating Profit (Rs cr)	₹ 808.71	₹ 1,267.94	-36.22%	₹ 912.11	-11.34%
Net Profit (Rs cr)	₹ 703.74	₹ 1,019.18	-30.95%	₹ 745.72	-5.63%
Diluted EPS (Rs)	₹ 35.21	₹ 51.02		₹ 37.31
Operating Margins	10.09%	12.90%		10.68%
Net Margins	8.78%	10.37%		8.73%