Two-wheeler maker Hero MotoCorp reported a 44.2% year-on-year (YoY) increase in consolidated profit at Rs 8.9 bn for the March 2021 quarter.
The company had posted a net profit of Rs 6.1 in the same period, a year ago. This growth was driven by an increase in revenue.
The company's revenue from operations grew by 37.2% YoY to Rs 86.9 bn with 18.5% volume growth for the March 2021 quarter.
However, both the company's quarterly profit and revenue fell by 17% and 11% sequentially as higher ownership cost hurt two-wheeler demand. The company sold a total of 1.6 m units of two-wheelers during Q4FY21, registering a growth of 18.5% over Q4FY20 but 15% fewer units than in the preceding quarter.
The decline came as demand in rural India, which was expected drive two-wheeler sales buoyed by a good monsoon, a bumper crop, increased government spending and less severe Covid-19 restrictions, failed to take off.
High fuel prices, a series of price hikes prior to the pandemic to counter the surge in commodity costs also caused sales to tumble.
Due to the year-on-year increase in revenue, the company's EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 78.8% YoY to Rs 12.3 bn while its EBITDA margin expanded 3.3% YoY to 14.1%.
The company has been able to drive profitable operating growth through a combination of key strategic initiatives such as the acceleration of the Leap-II savings program to offset the higher commodity prices and input costs.
Q4FY21 | Q4FY20 | YoY Change | |
---|---|---|---|
Revenue (in bn) | 86.9 | 63.3 | 37.20% |
EBITDA (in bn) | 12.3 | 6.9 | 78.80% |
EBITDA Margin | 14.10% | 10.80% | 3.30% |
Net Profit (in bn) | 8.9 | 6.1 | 44.20% |
Net Profit Margin | 10.20% | 9.70% | 0.50% |
The board of directors also proposed a final dividend of Rs 25 per share and a special dividend of Rs 10 per share.
Aggregating the dividend of Rs 90 per share and a special dividend of Rs 15 per equity share for the year, the total dividend for FY21 amounts to Rs 105 per share.
The special dividend has been declared to mark the achievement of the historic milestone of achieving 100 m cumulative production of two-wheelers.
The company has re-appointed the current Chairman, Managing Director and CEO, Mr Pawan Munjal, as the Chairman and CEO for a term of five years with effect from 1 October 2021, subject to the approval of the shareholders at the ensuing Annual General Meeting of the company.
Hero MotoCorp will also launch its first electric vehicle in FY22.
The company's journey has further been augmented with its recent partnership with Gogoro, the developer of the world's largest battery-swapping network.
Hero MotoCorp shares rose 4.7% to hit an intraday high of Rs 2,920 on the BSE yesterday, ahead of its March quarter earnings.
However, shares of the company fell as much as 3.2% today on account of profit-booking, to hit an intraday low of Rs 2,820.5, a day after it reported its results.
Shares of the company opened at Rs 2,962 on the BSE and at Rs 2,948 on the NSE.
The scrip touched its 52-week high of Rs 3,628.5 on 18 February 2021, and its 52-week low of Rs 1,955.40 on 7 May 2020.
At its current price, it is trading at a P/E ratio of 21.4
Hero MotoCorp Limited, formerly Hero Honda, is an Indian multinational motorcycle and scooter manufacturer based in New Delhi, India.
The company is the largest two-wheeler manufacturer in the world, and in India, where it has a market share of about 46% in the two-wheeler category.
Hero MotoCorp has five manufacturing facilities based at Dharuhera, Gurugram, Neemrana, Haridwar, and Halol under the Green Field stage.
These plants together have a production capacity of over 7.6 m two-wheelers. The company also has a sales and service network with over 6,000 dealerships and service points across India.
In 2007, Hero MotoCorp incorporated Hero Electric as a 100% subsidiary of the group. The company started manufacturing electric scooters from its Ludhiana plant.
For more details about the company, you can have a look at Hero MotoCorp's factsheet and Hero MotoCorp's quarterly results on our website.
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