BackHero MotoCorp earnings: Profit, revenue may improve in September quarter
The Pawan Munjal led company reported a 95.12 % year on year drop in standalone net profit to ₹61.31 crore for the June quarter amid a significant decline in retail sales due to the adverse impact of the Covid -19 pandemic
PremiumNEW DELHI: Hero MotoCorp Ltd, the country’s largest two-wheeler manufacturer, is expected to report an improvement in revenue and net profit in the September quarter, due to faster recovery in demand for entry level motorcycles in rural and the semi-urban markets.
According to estimates compiled by Bloomberg, eight analysts expect the company to report a net profit of ₹964.20 crore and 20 analysts estimate revenue from operations at ₹8763.50 crore.
In the corresponding period a year ago, the company reported a 10.39% drop in net profit of ₹874.80 crore.
The Pawan Munjal-led company reported a 95.12 % year on year drop in standalone net profit to ₹61.31 crore for the June quarter amid a significant decline in retail sales due to the adverse impact of the Covid -19 pandemic.
“Demand (bookings) has largely normalized for two-wheelers and passenger vehicles in 2QFY21; we expect a strong festive season and sustained recovery post the festive as well. Hence, we have raised our volume estimates for FY21/FY22 across segments. Demand recovery post the lifting of the lockdown has been stronger than expected across segments," said analysts of Motilal Oswal in the note.
The New Delhi-based company reported a 16.11% year-on-year rise in its domestic wholesales for September to 6,97,293 units due to robust recovery in sales of entry-level motorcycles in rural and semi-urban markets after the easing of lockdown measures.
On a sequential basis, the company's dispatches were higher than 56,8674 units in August and 51,4509 units in July. Hero restarted operations at its Haryana and Uttarakhand factories from 5 May, selling 1,20,000 units in the month.
Investors though are optimistic that Hero will benefit from a shift in demand towards entry and executive segment motorcycles due to the faster recovery in demand in the rural areas and increasing preference for personal mobility, and is better positioned to tackle current economic downturn compared to most of its competitors.
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