Hero MotoCorp, the world’s largest two-wheeler manufacturer, reported a 14% year-on-year increase in net profit for Q2, reaching Rs 1,204 crore and surpassing market expectations. Led by Pawan Munjal, the company also witnessed an 11% rise in revenue, totaling Rs 10,463 crore for the quarter, driven by increased volumes and demand in the rural sector.
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Earnings Performance and Market Expectations
The results outperformed the estimates of major brokerage firms. According to a poll among eight brokerages, analysts had predicted a 9% rise in net profit to around Rs 1,147 crore. Additionally, the revenue projection stood at Rs 10,223 crore, reflecting an anticipated 8% growth. However, Hero MotoCorp’s actual earnings exceeded these forecasts, emphasizing the company’s strong market position and ability to capture demand.
The company reported an EBITDA margin of 14.5%, up by 40 basis points (bps) compared to the previous year. This margin expansion highlights Hero MotoCorp’s operational efficiency and effective cost management strategies.
CEO’s Statement on Performance and Future Outlook
Commenting on the quarterly performance, CEO Niranjan Gupta said, “We have continued our exceptional performance in Q2 FY’25, once again creating a new high in both topline and bottom line. Our strong focus on cash management has resulted in us delivering strong cash flow, strengthening our financial position even further.”
Gupta highlighted that the recently concluded festive season played a pivotal role in achieving the highest retail numbers, with 16 lakh units sold, largely supported by demand from the rural sector. He also noted that a favorable monsoon season is expected to sustain this growth momentum in the two-wheeler industry. “The fundamentals look good for the Indian economy in general and the two-wheeler industry in particular,” Gupta added, expressing optimism about future market conditions.
Stock Market Reaction
Following the Q2 results announcement, Hero MotoCorp’s stock closed at Rs 4,604.30 on November 14, up by 1.84% from the previous day’s close. This increase reflects investor confidence in the company’s growth trajectory and market leadership.
Hero MotoCorp’s Q2 performance underscores its resilience in the competitive two-wheeler industry and solidifies its outlook for the upcoming quarters. The company’s focus on efficient cash flow management and favorable market conditions signal a promising future for stakeholders and customers alike.