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Hero MotoCorp Limited — Q2 FY24
Hero MotoCorp reported Q2 FY24 revenue of INR 9,445 crore and EBITDA margin of 14.1%, up 260 bps YoY, driven by commodity cost recovery and operating leverage.
bullish
high
✓ Verified against BSE filing
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Hero MotoCorp reported Q2 FY24 revenue of INR 9,445 crore and EBITDA margin of 14.1%, up 260 bps YoY, driven by commodity cost recovery and operating leverage. PAT grew 47% YoY to INR 1,054 crore. The premium journey is gaining traction with Harley-Davidson X440 and Karizma bookings strong; production ramp-up to 10,000 units/month for these models is underway. EV volumes are scaling, with weekly production exceeding 1,000 units, and the company is expanding to 100+ cities. Festive season retail grew 15% in the first 17 days, led by rural recovery and new launches. Management expects continued margin stability and plans to invest in growth priorities. Key risk: global geopolitical uncertainties could impact export recovery and commodity costs.
हीरो मोटोकॉर्प ने दूसरी तिमाही में 9,445 करोड़ रुपये की कमाई की। कंपनी का मुनाफा 47% बढ़कर 1,054 करोड़ रुपये हो गया। यह बढ़त कच्चे माल की लागत कम होने और बेहतर उत्पादन के कारण हुई। हार्ले-डेविडसन X440 और करिज्मा जैसी प्रीमियम बाइक की मांग बढ़ रही है, और कंपनी हर महीने 10,000 ऐसी बाइक बनाने की तैयारी कर रही है। इलेक्ट्रिक वाहनों का उत्पादन भी बढ़ रहा है, हर हफ्ते 1,000 से ज्यादा बन रहे हैं, और कंपनी 100 से ज्यादा शहरों में पहुंच बना रही है। त्योहारी सीजन में बिक्री 15% बढ़ी, खासकर गांवों में। कंपनी को मुनाफा स्थिर रहने की उम्मीद है, लेकिन दुनिया भर में अनिश्चितता से निर्यात और लागत पर असर पड़ सकता है।
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Global geopolitical issues impacting exports
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Read Transcript →Quarter Snapshot
Harley-Davidson X440 order book
25,000+
flat
Order book remains at 25,000+ as deliveries have started; 2,000+ delivered so far.
Karizma bookings
14,000
flat
Booking window closed; second window to open as supplies augment.
Festive season retail growth (first 17 days)
15%
+15% YoY
Hero's retail grew 15% YoY during the first 17 days of the festive season.
EV weekly production run-rate
1,000+ per week
flat
EV production has crossed 1,000 units per week in the last 3-4 weeks.
What Changed vs Last Quarter
NEW
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.
NEW
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.
NEW
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.
NEW
EV portfolio expansion with new price points in FY25
Hero plans to introduce mid and more affordable EV price points in fiscal year 2025.
DROPPED
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.
DROPPED
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.
DROPPED
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.
DROPPED
100 EV cities by December 2023
Vida will expand to 100 cities well before December end; currently present in 36 cities.
NEW RISK
Global geopolitical issues impacting exports
Management acknowledged geopolitical tensions could affect export recovery, though domestic demand remains resilient.
NEW RISK
EV profitability and BOM cost reduction
EV business is not yet profitable at gross profit level; BOM cost reduction is a work in progress and may take time to achieve scale.
NEW RISK
Scooter market share weakness in 125cc segment
Hero is losing share in the 125cc scooter segment due to product transitions; new models may take time to gain traction.
RISK GONE
Sustained weakness in entry-level commuter segment
The bottom-of-pyramid segment has been slow to recover; if demand does not pick up, volume growth may lag.
RISK GONE
EV subsidy withdrawal impact on margins
Removal of EV subsidies has hurt unit gross margins; profitability may take longer if cost reduction doesn't keep pace.
RISK GONE
Inventory buildup ahead of festive season
Inventory currently at 6 weeks; if festive demand disappoints, channel inventory could become elevated.
RISK GONE
Regulatory and tax inquiries
Ongoing government agency inquiries; management sees no need for provisions but uncertainty remains.
Fast read
Guidance and risk preview
Hero plans to scale premium stores to over 100 in the next six months, from a recent launch.
Management acknowledged geopolitical tensions could affect export recovery, though domestic demand remains resilient.
View Risks →