Q2FY23 Preview: Hero Motocorp: Revenue seen at Rs87,080 million, PAT at Rs7,571 million

2 Nov 2022 , 09:42 AM

Result date: 3^rd November, 2022
Recommendation: Buy
Target price: Rs3,100

Hero Motocorp’s sales volumes grew 2.7% sequentially and remained flattish (down 0.7%) over the year-ago quarter. Sequential volumes were driven by the fact that the company upstocking for the festive season as well as easing semiconductor supplies. Improving realizations though could aid revenue both sequentially as well as over the year-ago quarter.

EBITDA margin could improve slightly on a sequential basis on the back of easing input costs and price hikes.

The company’s Profit After Tax (PAT) could increase 21.2% sequentially.

Important management insights to watch out for:

• Demand trends across all key segments
• Margin levers and outlook

	September 2022 estimates	QoQ change	YoY change
Volumes	1,428,168	2.7%	(0.7)%
Revenue (Rs. mn)	87,080	3.8%	3.0%
EBITDA (Rs. mn)	10,156	7.9%	(4.8)%
EBITDA margin	11.7%	45 bps	(95) bps
Profit After Tax (Rs. mn)	7,571	21.2%	(4.7)%

Source: IIFL Research