Hero MotoCorp slips after weak Q3 outcome

11 Feb 2022 , 09:17 AM

Profit before tax (PBT) fell 31.38% year-on-year to Rs 935.98 crore in Q3 December 2021.

On a standalone basis, Hero MotoCorps net profit declined 36.73% to Rs 686.13 crore on 19.36% fall in net sales to Rs 7883.27 crore in Q3 December 2021 over Q3 December 2020. Parts business continued to do very well at Rs 1,186 crore, with growth of 15%.

Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) for the quarter stood at Rs 960 crore. EBITDA margin for the third quarter was at 12.2%.

The company declared interim dividend of Rs 60 per share. The payment of interim dividend/ dispatch of dividend warrants will be completed by 12 March 2022.

The company sold 12.92 lakh units of motorcycles and scooters in Q3 FY22; within this, Global Business sold 61 thousand units – a growth of around 16%.

Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp, said, The current fiscal has seen the domestic two-wheeler industry impacted by twin challenge of softer demand due to pandemic and margin squeeze due to sharp commodity cost inflation. Our continued focus on savings programs combined with judicious price increases have helped cushion the impact on customers as well as margins.

With rapid easing of 3rd wave, and full re-opening of all the sectors of the economy in coming weeks, including the hospitality sector, education sector etc., we expect a much broader economic recovery and increase in consumer confidence. The recently announced Union Budget, with its focus on growth through increased capital expenditure, as well as continued support to rural and MSME sector augurs well for FY 23 demand scenario in general and two-wheeler industry in particular.

Commodity cost pressures are expected to ease, as supply imbalances get corrected gradually, some part of which is evident in the softening of precious metal and steel prices. We will continue to accelerate our savings program, premiumise within the brands, and take price increases where necessary.

Hero MotoCorp designs and develops technologically advanced motorcycles and scooters for customers around the world. It became the worlds largest two-wheeler manufacturer in 2001, in terms of unit volume sales in a calendar year.

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