Hero MotoCorp FY24 Annual Earnings Summary
4 quarters covered · ₹37,789 Cr revenue · ₹3,742 Cr PAT · 10.3% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY24Risks flagged during the year
The bottom-of-pyramid segment has been slow to recover; if demand does not pick up, volume growth may lag.
Q3 FY24 · highIndustry discounting in EVs could intensify, pressuring margins if Hero's cost reduction roadmap falls short.
Q4 FY24 · highDespite strong product launches, Hero's overall market share has been declining YoY and sequentially, raising concerns about competitive positioning.
Q1 FY24 · mediumRemoval of EV subsidies has hurt unit gross margins; profitability may take longer if cost reduction doesn't keep pace.
Q1 FY24 · mediumInventory currently at 6 weeks; if festive demand disappoints, channel inventory could become elevated.
Q2 FY24 · mediumManagement acknowledged geopolitical tensions could affect export recovery, though domestic demand remains resilient.
Q2 FY24 · mediumEV business is not yet profitable at gross profit level; BOM cost reduction is a work in progress and may take time to achieve scale.
Q2 FY24 · mediumHero is losing share in the 125cc scooter segment due to product transitions; new models may take time to gain traction.
Q3 FY24 · mediumDespite strong product lineup, market share in premium segments has not yet reflected investments; execution risk remains.
Q3 FY24 · mediumWhile inquiries are rising, actual consumption conversion may lag if income growth or financing access disappoints.
Q4 FY24 · mediumEV business continues to impact overall margins by 130 bps, and profitability depends on subsidy regime and cost reduction, which are uncertain.
Q4 FY24 · mediumNew premium models (Harley, Mavrick, Karizma) have seen lower-than-expected volumes; scaling up distribution and brand building may take time.
What changed through the year
Q1 FY24 · ICE margin tramline of 14%-16% maintained
Management reiterated the long-term ICE margin range of 14%-16%, with current margins back to pre-COVID levels.
Q1 FY24 · EV business drag of ~100 bps on margins
The EV business (Vida) is expected to impact overall margins by approximately 100 basis points as it scales.
Q1 FY24 · Double-digit industry growth expected ahead of festive season
Management expects double-digit growth for the two-wheeler industry driven by government capex, easing inflation, and good monsoons.
Q1 FY24 · 100 EV cities by December 2023
Vida will expand to 100 cities well before December end; currently present in 36 cities.
Q2 FY24 · Premium store expansion to 100+ in six months
Hero plans to scale premium stores to over 100 in the next six months, from a recent launch.
Q2 FY24 · Hero 2.0 store count to reach 500 in six months
The company aims to have 500 Hero 2.0 stores within six months, up from 200+ currently.
Q2 FY24 · Harley and Karizma production ramp-up to 10,000/month
Management guided to ramp up combined production of Harley-Davidson X440 and Karizma to around 10,000 units per month in stage one.
Q2 FY24 · EV portfolio expansion with new price points in FY25
Hero plans to introduce mid and more affordable EV price points in fiscal year 2025.
Q3 FY24 · Double-digit industry revenue growth in FY25
Management expects the two-wheeler industry to grow at double-digit revenue in FY25, with Hero aiming to outperform.
Q3 FY24 · Three new EV models in Q1 FY25 at distinct price points
Hero will launch affordable, mid, and premium EV scooters in Q1 FY25, targeting price points around INR 1 lakh, INR 1.25 lakh, and INR 1.5 lakh.
Q3 FY24 · 100 VIDA hubs by FY25
Hero plans to expand exclusive VIDA hubs from 18 to 100 in the next fiscal year.
Q3 FY24 · PAM business capacity to INR 10,000 Cr
Investment of INR 600 Cr over two years to expand parts, accessories, and merchandise capacity to over INR 10,000 Cr annual revenue.
Q4 FY24 · Double-digit revenue growth in FY25
Management is confident of achieving double-digit revenue growth in FY25, driven by volume, mix, and pricing.
Q4 FY24 · Capex guidance of INR 1,000-1,500 crore for FY25
Capital expenditure for FY25 is expected to be between INR 1,000-1,500 crore, including GPC2 expansion.
Q4 FY24 · Xtreme 125R capacity ramp to 20,000-25,000 per month by June-July
Production capacity for Xtreme 125R will be increased to 1,000 units per day (approx. 20,000-25,000 per month) in the next 2-3 months.
Q4 FY24 · EV portfolio expansion in H1 FY25 with PLI compliance by Q2
New EV products in mid and mass segments will be launched in H1, and PLI compliance is expected by Q2 FY25.