Hero MotoCorp Q1 net profit seen at ₹82.2 crore, down nearly 94% on year1 min read . Updated: 13 Aug 2020, 10:17 AM IST
- Vehicle manufacturers had to suspend operations, effective 22 March, following the nationwide lockdown to contain the spread of covid-19 pandemic. As a result, companies reported zero production and sales during April
NEW DELHI: Hero MotoCorp Ltd, the country’s largest two-wheeler manufacturer, is expected to report a slump in its net profit for the June ended quarter due pandemic-related disruptions during the period. The company is likely to report a net profit of ₹82.21 crore, according to a Bloomberg poll of eight analysts, while revenue from operations is seen at ₹2,755.7 crore (20 analysts).
In the corresponding period last year, the company had reported a net profit of ₹1,257.3 crore as a result of an exceptional gain of ₹737.3 crore.
"The first quarter of FY21 was an unprecedented quarter for the auto space, in line with the rest of the economy. With the first six to seven weeks of the period, a complete write off on account of measures put in place to contain Covid-19 spread, production and sales activity was restricted to the latter half – and that too in a limited manner," said analysts at ICICI Securities in a note.
Vehicle manufacturers like Hero MotoCorp had to suspend operations, effective 22 March, following the nationwide lockdown to contain the spread of covid-19 pandemic.
As a result, As a result, companies reported zero production and sales during April.
The Pawan Munjal-led company, however, recovered with July wholesales down just 3.9 % year-on-year at 5,14,509 units, largely led by robust demand for entry-level motorcycles in rural market after the easing of lockdown curbs. In June, sales were at 4.5 lakh units and 1.2 lakh units in May.
Investors are optimistic that the company will benefit from a shift in demand towards entry and executive segment motorcycles due to the faster recovery in rural areas and increasing preference for personal mobility.