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Hero MotoCorp Limited — Q1 FY25
Hero MotoCorp reported a strong Q1 FY25 with record revenue of INR 10,144 crore (+16% YoY) and highest-ever PAT of INR 1,123 crore (+36% YoY).
bullish
high
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Hero MotoCorp reported a strong Q1 FY25 with record revenue of INR 10,144 crore (+16% YoY) and highest-ever PAT of INR 1,123 crore (+36% YoY). EBITDA grew 21% to INR 1,460 crore, with ICE margins improving to 16.4%, while EV investments dragged overall EBITDA margin to 14.4%. Growth was driven by a sharp recovery in the 125cc segment (market share up from 13% to 20% QoQ), rural demand uptick, and cost savings. Management guided for continued volume growth, premium portfolio expansion, and EV scale-up with new products launching this fiscal. Key risks include sustained EV investment drag and potential slowdown in rural recovery.
हीरो मोटोकॉर्प ने पहली तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल कमाई ₹10,144 करोड़ रही, जो पिछले साल से 16% ज्यादा है। मुनाफा ₹1,123 करोड़ पहुंचा, जो 36% की बढ़ोतरी है। कंपनी ने परिचालन मुनाफे में 21% का इजाफा किया। पेट्रोल बाइक से मुनाफा 16.4% रहा, लेकिन इलेक्ट्रिक वाहनों पर ज्यादा खर्च के कारण कुल मुनाफा 14.4% पर आ गया। 125cc बाइक सेगमेंट में बाजार हिस्सेदारी 13% से बढ़कर 20% हो गई। गांवों में मांग बढ़ी और लागत बचत से भी मदद मिली। कंपनी आगे और बाइक बेचने, महंगे मॉडल लाने और नए इलेक्ट्रिक वाहन उतारने की योजना बना रही है। जोखिम यह है कि इलेक्ट्रिक वाहनों पर खर्च बना रहेगा और गांवों की मांग कम हो सकती है।
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EV investment drag may persist
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125cc Market Share
20%
+7pp QoQ
Sharp recovery from 13% in Q4 FY24, driven by Xtreme 125R and Super Splendor.
Vida EV Monthly Sales
5,000 units
+100% QoQ
Crossed 5,000 units in July 2024, with network expanded to 175 cities.
Hero 2.0 Stores
520+
+120 QoQ
Over 520 stores upgraded, enhancing retail experience and customer satisfaction.
EV EBITDA Impact
198 bps
+28 bps QoQ
EV investment drag increased from 170 bps in Q4 to 198 bps in Q1, reflecting higher spend.
What Changed vs Last Quarter
NEW
Xtreme 125R capacity to reach 40,000 units/month
Management plans to ramp up Xtreme 125R production from 25,000 to 40,000 units per month in the next couple of months.
NEW
Premia stores to cross 100 by end of fiscal
The company targets to have over 100 Premia stores by March 2025, up from 40 currently.
NEW
New EV products to be PLI compliant from October
The upcoming EV range expansion (mid and affordable segments) will be PLI compliant, launching from October 2024 onwards.
UPDATED
CapEx guidance of INR 1,000-1,200 crore per annum
Annual capital expenditure is expected to be in the range of INR 1,000-1,200 crore.
DROPPED
Double-digit revenue growth in FY25
Management is confident of achieving double-digit revenue growth in FY25, driven by volume, mix, and pricing.
DROPPED
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.
DROPPED
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.
NEW RISK
EV investment drag may persist
EV business continues to weigh on margins (198 bps impact), and profitability timeline remains uncertain despite volume growth.
NEW RISK
Rural recovery may slow
While rural demand is improving, any macroeconomic shock or poor monsoon could derail the recovery, impacting entry-level sales.
NEW RISK
Market share pressure in premium segment
Despite new launches, overall market share is still declining YoY; premium segment competition remains intense.
NEW RISK
Bangladesh operations disruption
Political unrest in Bangladesh has caused a setback, though it represents only ~0.3-0.4% of total revenue.
RISK GONE
Market share erosion in core segments
Despite strong product launches, Hero's overall market share has been declining YoY and sequentially, raising concerns about competitive positioning.
RISK GONE
EV margin drag and subsidy dependence
EV business continues to impact overall margins by 130 bps, and profitability depends on subsidy regime and cost reduction, which are uncertain.
RISK GONE
Premium segment ramp-up may be slower than expected
New premium models (Harley, Mavrick, Karizma) have seen lower-than-expected volumes; scaling up distribution and brand building may take time.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q3 FY24, Q4 FY24
Management is confident of achieving double-digit revenue growth in FY25, driven by volume, mix, and pricing.
Mentioned in Q2 FY24, Q4 FY24
New EV products in mid and mass segments will be launched in H1, and PLI compliance is expected by Q2 FY25.
Fast read
Guidance and risk preview
Management plans to ramp up Xtreme 125R production from 25,000 to 40,000 units per month in the next couple of months.
EV business continues to weigh on margins (198 bps impact), and profitability timeline remains uncertain despite volume growth.
View Risks →