Auto Major Dividend Rs 40: Profit Climbs 18% To Rs 1,016 Crore; Shares 4% Up Today

Auto Major Hero MotoCorp zoomed 4% on Friday following the release of its fourth-quarter earnings report for the fiscal year 2023-24. The company posted a standalone profit of Rs 1,016 crore in Q4 FY24, marking a significant 18% increase from Rs 859 crore reported in the same period last year.

Shares of HeroMoto Corp saw a notable uptick, with a 3.44% increase to Rs 4,924 on the BSE, while on the NSE, the stock rose by 3.40% to Rs 4925.25.

Hero MotoCorp attributed its strong financial performance to robust revenue growth, with revenue from operations for the quarter reaching Rs 9,519 crore, reflecting a year-on-year increase of 15% from Rs 8,307 crore.

"HMCL's Q4FY24 EBITDA surged 25% YoY to INR13.6bn (estimate: INR13.1bn), beating the estimate owing to better realisation and gross margin. HMCL is geared up to benefit from the 2W industry upcycle and new products including Harley X440, Mavrick 440, Karizma 210, Xtreme 125, and upcoming products such as Xoom 125/160 and EVs that can potentially add sales of 30,000-40,000 units per month," Nuvama Equities said in the report.

The company's EBIDTA margin for the quarter stood at 14.3%, showing a notable improvement of 120 basis points compared to the previous year. This improvement was primarily driven by a favourable product mix, lower commodity costs, increased savings, and strategic price adjustments.

Hero MotoCorp recorded consolidated revenue of Rs 9,617 crore for the quarter, up 14% from the prior year. The profit after tax (PAT) increased significantly, hitting Rs 943 crore, up 16% from the previous year.

"HMCL has started with the Vida V1 model and expects to launch more scooters and motorcycles in due course. Four scooters will be launched in FY25 across use scenarios. Multiple motorcycles are to be launched across use-cases from FY26 onwards through our own efforts and collaboration with Zero Motorcycles. The new scooters are expected to receive PLI approval in subsequent quarters. E-scooters are currently available in 120+ cities and will be expanded to more cities," Nuvama said.

In addition to its financial performance, Hero MotoCorp announced a final dividend of Rs 40 per share for the fiscal year 2023-24. This, combined with interim and special dividends totaling Rs 100 per equity share, brings the aggregate total dividend for the year to Rs 140 per equity share, equivalent to an impressive 7,000%.

"The financial year 2024 has been a remarkable period for Hero MotoCorp. During the year, our focus on product launches, network upgrade and customer satisfaction drove us to new heights. From the highest number of product launches, to the expansion of new format retail outlets and upgrade at super speed, to a digital‐first approach in premium, we set the building blocks in place for accelerated growth in future"Niranjan Gupta, CEO Hero MotoCorp said in filling.

"HMCL is a key beneficiary of the likely uptick in rural demand owing to its robust network. We forecast a revenue/earnings CAGR of 11%/15% over FY24-26E with a healthy FCF (~INR39bn/year) and dividend yield (~4%). Maintain 'BUY' with TP of INR5,800 (unchanged) based on 21x PE and value of investments/cash at INR665/share," Nuvama added.

Hero MotoCorp said it made a big impression in the luxury motorcycle sector this year by launching six new models: the Xtreme 125R, Xtreme 200S, Xtreme 160R 4V, Harley-Davidson X440, Karizma XMR, and Mavrick 440.

With a strong financial foundation and a portfolio of innovative products, Hero MotoCorp is well-positioned for accelerated growth in the future, as it continues to prioritise customer-centric strategies and expansion initiatives.