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Hero MotoCorp Limited — Q2 FY25
Hero MotoCorp reported its highest-ever quarterly revenue of INR 10,463 crore (up 11% YoY), EBITDA of INR 1,516 crore (up 14% YoY), and PAT of INR 1,204 crore (up 14% YoY).
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Hero MotoCorp reported its highest-ever quarterly revenue of INR 10,463 crore (up 11% YoY), EBITDA of INR 1,516 crore (up 14% YoY), and PAT of INR 1,204 crore (up 14% YoY). The strong performance was driven by mix improvement, lower material costs, and deep savings, with ICE EBITDA margin expanding 160 bps to 16.5%. EV business investment of INR 175 crore weighed on overall EBITDA margin, which improved 40 bps to 14.5%. Festive season retail sales hit a record 1.6 million units (up 13% YoY), with Vahan market share rising to 31.6%. Management remains optimistic about demand, citing rural recovery and upcoming product launches in premium, scooter, and EV segments. Key risk: rising delinquencies in the financing business (Hero FinCorp) could pressure profitability and growth.
हीरो मोटोकॉर्प ने अब तक का सबसे बड़ा तिमाही कारोबार किया। कंपनी की कमाई 10,463 करोड़ रुपये रही, जो पिछले साल से 11% ज्यादा है। मुनाफा 1,204 करोड़ रुपये रहा, जो 14% बढ़ा। यह अच्छा प्रदर्शन महंगे मॉडलों की बिक्री बढ़ने, कच्चे माल की लागत घटने और खर्चों में कटौती से हुआ। पुरानी तकनीक (ICE) वाली बाइक्स पर मुनाफा 16.5% हो गया। इलेक्ट्रिक वाहन (EV) बनाने पर 175 करोड़ रुपये खर्च हुए, जिससे कुल मुनाफा थोड़ा कम (14.5%) रहा। त्योहारों में 16 लाख गाड़ियां बिकीं, जो पिछले साल से 13% ज्यादा हैं। बाजार हिस्सेदारी 31.6% पहुंच गई। कंपनी को गांवों में मांग बढ़ने और नए प्रीमियम, स्कूटर व EV मॉडलों से उम्मीद है। लेकिन सावधानी: हीरो फिनकॉर्प में कर्ज न चुकाने वालों की संख्या बढ़ रही है, जिससे मुनाफा कम हो सकता है।
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Rising delinquencies in Hero FinCorp
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Festive retail sales
1.6M units
+13% YoY
Highest-ever festive sales over 32 days, driven by strong rural and urban demand.
EV monthly volume
11,600 units
+132% vs Q2 avg
EV retail scaled to 11,600 units during festive, with market share reaching 5.4%.
EV market share in top cities
20%
+15pp vs prior
Achieved 20% EV market share in five cities and 10% in ten cities during festive.
Parts & accessories revenue
INR 1,456 crore
+7.5% YoY
Highest-ever quarterly revenue from parts, accessories, and merchandise business.
What Changed vs Last Quarter
NEW
EBITDA margin guidance of 14%-16% maintained
Management reiterated the overall EBITDA margin range of 14%-16%, despite continued investments in EV and premium segments.
NEW
EV portfolio expansion within six months
VIDA will launch new scooter models covering most price and customer segments within six months, including before end of calendar year.
NEW
PLI benefits expected from FY2026
EV products will become PLI-compliant in FY2026, with benefits starting to accrue from that period.
NEW
Premium store expansion to accelerate
Company plans to open 100 premium stores by end of FY2025, with further acceleration expected.
DROPPED
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.
DROPPED
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.
DROPPED
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.
DROPPED
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.
NEW RISK
Rising delinquencies in Hero FinCorp
Delinquencies and collection slowdown in H1 impacted HFCL profitability; management acknowledged industry-wide credit cost increase.
NEW RISK
Demand bunching around festive season
Analyst flagged that strong festive retail may not sustain post-festival, as seen last year with sharp drop in Vahan registrations.
NEW RISK
Geopolitical and economic risks in export markets
Countries like Bangladesh, Turkey, and Nigeria face economic challenges that could slow export growth.
RISK GONE
EV investment drag may persist
EV business continues to weigh on margins (198 bps impact), and profitability timeline remains uncertain despite volume growth.
RISK GONE
Rural recovery may slow
While rural demand is improving, any macroeconomic shock or poor monsoon could derail the recovery, impacting entry-level sales.
RISK GONE
Market share pressure in premium segment
Despite new launches, overall market share is still declining YoY; premium segment competition remains intense.
RISK GONE
Bangladesh operations disruption
Political unrest in Bangladesh has caused a setback, though it represents only ~0.3-0.4% of total revenue.
🤫 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 Q1 FY25, Q4 FY24
Annual capital expenditure is expected to be in the range of INR 1,000-1,200 crore.
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.
Mentioned in Q1 FY25, Q2 FY24
Despite new launches, overall market share is still declining YoY; premium segment competition remains intense.
Mentioned in Q1 FY25, Q4 FY24
Management plans to ramp up Xtreme 125R production from 25,000 to 40,000 units per month in the next couple of months.
Fast read
Guidance and risk preview
Management reiterated the overall EBITDA margin range of 14%-16%, despite continued investments in EV and premium segments.
Delinquencies and collection slowdown in H1 impacted HFCL profitability; management acknowledged industry-wide credit cost increase.
View Risks →