Q4FY22 Preview: Hero Motocorp: Revenues seen at Rs 73,621 million, PAT at Rs6,260 million

30 Apr 2022 , 11:44 AM

Result date: 3^rd May, 2022
Recommendation: Buy
Target price: Rs3,200
 
Hero Motocorp witnessed sharp fall in sales volume for the March 2022 quarter. Sales were down 24% over the year-ago quarter and 8% sequentially. Though price hikes could offset some pressures from soaring input costs, they are unlikely to cushion revenue. Company’s revenue could decline 15.2% over the year-ago quarter.

EBITDA margins could contract 195 basis points year-on-year to 12.0%, even as improving revenue share of spares could keep sequential decline at 18 basis points.

Weakness in revenue as well as negative operating leverage could lead to 27.6% fall in Profit After Tax as compared to the year-ago quarter.

Important management insights to watch out for:

• Outlook on demand across all segments and markets
• Update on plans to launch its own EV scooter
• Trends in input cost inflation, pricing action planned and margin levers

 

Rs Million	March 2022 estimates	YoY change	QoQ change
Revenue	73,621	(15.2)%	(6.6)%
EBITDA	8,832	(27.1)%	(8.0)%
Profit After Tax	6,260	(27.6)%	(8.8)%

Source: IIFL Research