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HERO MOTOCORP 2019-20 Annual Report Analysis
Tue, 31 Mar

HERO MOTOCORP has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

HERO MOTOCORP Income Statement Analysis

  • Operating income during the year fell 13.9% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 5.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.2% in FY20 as against 14.8% in FY19.
  • Depreciation charges increased by 35.4% and finance costs increased by 25.4% YoY, respectively.
  • Other income grew by 6.4% YoY.
  • Net profit for the year grew by 6.4% YoY.
  • Net profit margins during the year grew from 10.0% in FY19 to 12.4% in FY20.

HERO MOTOCORP Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 339,694 292,526 -13.9%
Other income Rs m 6,867 7,306 6.4%
Total Revenues Rs m 346,561 299,832 -13.5%
Gross profit Rs m 50,184 47,383 -5.6%
Depreciation Rs m 6,244 8,458 35.4%
Interest Rs m 372 466 25.4%
Profit before tax Rs m 50,435 45,765 -9.3%
Tax Rs m 16,380 9,517 -41.9%
Profit after tax Rs m 34,056 36,248 6.4%
Gross profit margin % 14.8 16.2
Effective tax rate % 32.5 20.8
Net profit margin % 10.0 12.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HERO MOTOCORP Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 43 billion as compared to Rs 44 billion in FY19, thereby witnessing an decrease of -3.0%.
  • Long-term debt down at Rs 440 million as compared to Rs 1 billion during FY19, a fall of 64.7%.
  • Current assets rose 3% and stood at Rs 86 billion, while fixed assets rose 4% and stood at Rs 121 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 208 billion as against Rs 201 billion during FY19, thereby witnessing a growth of 3%.

HERO MOTOCORP Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 131,108 143,908 9.8
 
Current Liabilities Rs m 44,092 42,791 -3.0
Long-term Debt Rs m 1,248 440 -64.7
Total Liabilities Rs m 201,036 207,730 3.3
 
Current assets Rs m 84,132 86,492 2.8
Fixed Assets Rs m 116,904 121,238 3.7
Total Assets Rs m 201,036 207,730 3.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HERO MOTOCORP Cash Flow Statement Analysis

  • HERO MOTOCORP's cash flow from operating activities (CFO) during FY20 stood at Rs 55 billion, an improvement of 434.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -28 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -26 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 972 million from the Rs 775 million net cash flows seen during FY19.

HERO MOTOCORP Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 10,323 55,181 434.6%
Cash Flow from Investing Activities Rs m 12,976 -28,191 -
Cash Flow from Financing Activities Rs m -22,524 -26,018 -
Net Cash Flow Rs m 775 972 25.4%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HERO MOTOCORP

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 181.5, an improvement from the EPS of Rs 170.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,594.2, stands at 8.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 10.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 1,700.8 1,464.5
TTM Earnings per share Rs 170.5 181.5
Diluted earnings per share Rs 170.4 181.4
Price to Cash Flow x 12.7 10.0
TTM P/E ratio x 201.8 8.8
Price / Book Value ratio x 4.9 3.1
Market Cap Rs m 637,049 449,034
Dividends per share (Unadj.) Rs 87.0 90.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HERO MOTOCORP

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.0x during FY20, from 1.9x during FY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 99.1x during FY20, from 136.7x during FY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company declined and down at 25.2% during FY20, from 26.0% during FY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company declined and down at 32.0% during FY20, from 38.4% during FY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 17.7% during FY20, from 17.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.9 2.0
Debtors’ Days Days 3 2
Interest coverage x 136.7 99.1
Debt to equity ratio x 0.0 0.0
Return on assets % 17.1 17.7
Return on equity % 26.0 25.2
Return on capital employed % 38.4 32.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how HERO MOTOCORP has performed over the last 5 years, please visit here.

HERO MOTOCORP Share Price Performance

Over the last one year, HERO MOTOCORP share price has moved down from Rs 2,555.3 to Rs 1,594.2, registering a loss of Rs 961.1 or around 37.6%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 10,746.2 (up 1.3%). Over the last one year it has moved down from 18,824.9 to 10,746.2, a loss of 8,079 points (down 42.9%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for HERO MOTOCORP and quarterly results for HERO MOTOCORP)

Annual Report FAQs

What is the current share price of HERO MOTOCORP?

HERO MOTOCORP currently trades at Rs 4,555.1 per share. You can check out the latest share price performance of HERO MOTOCORP here...

What was the revenue of HERO MOTOCORP in FY20? How does it compare to earlier years?

The revenues of HERO MOTOCORP stood at Rs 299,832 m in FY20, which was down -13.5% compared to Rs 346,561 m reported in FY19.

HERO MOTOCORP's revenue has grown from Rs 266,117 m in FY16 to Rs 299,832 m in FY20.

Over the past 5 years, the revenue of HERO MOTOCORP has grown at a CAGR of 3.0%.

What was the net profit of HERO MOTOCORP in FY20? How does it compare to earlier years?

The net profit of HERO MOTOCORP stood at Rs 36,248 m in FY20, which was up 6.4% compared to Rs 34,056 m reported in FY19.

This compares to a net profit of Rs 36,725 m in FY18 and a net profit of Rs 32,293 m in FY17.

Over the past 5 years, HERO MOTOCORP net profit has grown at a CAGR of 4.2%.

What does the cash flow statement of HERO MOTOCORP reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of HERO MOTOCORP reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 55,181 m as compared to Rs 10,323 m in FY19.
  • Cash flow from investments decreased in FY20 and stood at Rs -28,191 m as compared to Rs 12,976 m in FY19.
  • Cash flow from financial activity decreased in FY20 and stood at Rs -26,018 m as compared to Rs -22,524 m in FY19.

Here's the cash flow statement of HERO MOTOCORP for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations37,22440,07240,17210,32355,181
From Investments-23,002-19,720-18,58212,976-28,191
From Financial Activity-14,747-20,359-21,025-22,524-26,018
Net Cashflow-525-6566775972

What does the Key Ratio analysis of HERO MOTOCORP reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of HERO MOTOCORP reveals:

  • Operating profit margins witnessed a fall and down at 16.2% in FY20 as against 14.8% in FY19.
  • Net profit margins grew from 10.0% in FY19 to 12.4% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.0 as compared to 0.0 in FY19.

Here's the ratio/financial analysis of HERO MOTOCORP for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)16.817.416.714.816.2
Net Profit Margin (%)11.712.311.510.012.4
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of HERO MOTOCORP

 

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