Hero MotoCorp's Q1 Profit Rises by 47%, Crossing Revenue of £10 Billion

Hero MotoCorp reported a significant 47% increase in consolidated profit after tax, reaching Rs 1,032 crore for the first quarter ending June 2024. This rise was attributed to higher sales. The company had previously recorded a profit after tax of Rs 701 crore during the same period last year. Revenue from operations also saw an increase, climbing to Rs 10,211 crore from Rs 8,851 crore, as stated in a regulatory filing.

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On a standalone basis, Hero MotoCorp's profit after tax grew by 36% year-on-year, amounting to Rs 1,123 crore, marking its highest-ever post-tax profit. Standalone revenue from operations stood at Rs 10,144 crore for the reporting quarter, reflecting a growth of 16% from Rs 8,767 crore a year earlier. The company sold 15.35 lakh units of motorcycles and scooters in the April-June period this fiscal year compared to 13.53 lakh units in the first quarter of FY24.

Positive Trends and Future Expectations

Hero MotoCorp observed positive trends across its domestic, electric vehicle (EV), and global businesses during the quarter. The company also noted sequential improvement in retail sales. It anticipates continued momentum in the coming quarters due to positive customer sentiments, favourable monsoons, and the upcoming festive season. The company has several product launches planned in both internal combustion engine (ICE) and EV categories.

CEO Niranjan Gupta commented on the company's performance: "We continue to be on the profitable growth journey, crossing Rs 10,000 crore revenue for the first time ever, accompanied by highest ever underlying PAT." He added that Hero MotoCorp is investing in long-term capability building to ensure sustained growth in the future.

Market Share and New Models

Gupta highlighted that the company is experiencing a sharp recovery in market share within the 125 cc segment, driven by the new Xtreme 125 cc model. Hero MotoCorp continues to maintain a strong market share in the entry and deluxe 100/110 cc segments. "Our focus moving forward will be building our brands in the premium segment on the back of launches done in last few quarters," Gupta said. He also mentioned plans to launch new scooter models within the next two quarters to revitalise this portfolio.

The company's EV brand Vida is beginning to expand its presence and market share. Hero MotoCorp plans to extend its portfolio into more affordable segments within this fiscal year. Gupta noted that overall economic indicators in India are promising, with inclusive policies and capital allocation to infrastructure and rural sectors announced in the union budget expected to boost demand.

Economic Indicators and Consumer Spending

With inflationary pressures easing, consumer spending power is set to rise, further driving momentum as Hero MotoCorp prepares for a significant festive season ahead. "Overall, we are optimistic about the demand trajectory for the coming quarters," Gupta said. "Our product launches and strategic initiatives are well aligned to capitalize on this positive market environment, ensuring continued growth and value creation for all our stakeholders."

Hero MotoCorp shares ended Tuesday down by 1.36%, closing at Rs 5,240.45 apiece on the BSE.

The company remains optimistic about future demand trends and is strategically positioned to leverage this positive market environment through its upcoming product launches and initiatives aimed at sustained growth and value creation for stakeholders.