Hero Motocorp Q3FY22 Preview: Revenue seen at Rs76,310 million, PAT at Rs6,435 million

8 Feb 2022 , 02:16 PM

Result date: 10th February, 2022
Recommendation: Buy
Target price: Rs3,360

(Source: IIFL Research)

Hero Motocorp is likely to post muted set of numbers for Q3FY22. Amid volume decline of 30% on a YoY basis, revenue too could fall 21.9% and will be partly aided by price hikes. Weak demand during the festive season and in rural markets have impacted two wheeler sales in the quarter. Higher average selling prices and better performance of exports though could be key positives.

Pressure arising from declining revenues could intensify further amid rising costs of key inputs such as aluminium, lead, and copper. Thus fall in EBITDA as well as PAT is likely to be more severe when compared to revenues, as compared to the year ago quarter.

Important management insights to watch out for:

• Demand trends
• Outlook on input costs, margins

	December 2021 estimates	YoY change	QoQ change
Volumes	1,292,136	(30.0%)	(10.2%)
Revenue (Rs. mn)	76,310	(21.9%)	(9.7%)
EBITDA (Rs. mn)	8,802	(37.7%)	(17.5%)
PAT (Rs. mn)	6,435	(40.7%)	(19.0%)

Source: Company, IIFL Research