HERO MOTOCORP 2019-20 Annual Report Analysis

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HERO MOTOCORP 2019-20 Annual Report Analysis
Thu, 6 Aug

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 19.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.9% 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 5.6% YoY.
  • Net profit margins during the year grew from 10.0% in FY19 to 12.2% in FY20.

HERO MOTOCORP Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 339,708 292,540 -13.9%
Other income Rs m 6,867 7,306 6.4%
Total Revenues Rs m 346,576 299,845 -13.5%
Gross profit Rs m 50,184 40,609 -19.1%
Depreciation Rs m 6,244 8,458 35.4%
Interest Rs m 372 466 25.4%
Profit before tax Rs m 50,435 38,991 -22.7%
Tax Rs m 16,380 9,517 -41.9%
Profit after tax Rs m 34,664 36,594 5.6%
Gross profit margin % 14.8 13.9
Effective tax rate % 32.5 24.4
Net profit margin % 10.0 12.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Know More: Is India's Economic Recovery Sustainable?

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 24% and stood at Rs 69 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 197 billion as against Rs 185 billion during FY19, thereby witnessing a growth of 6%.

HERO MOTOCORP Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 131,204 144,063 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 185,044 196,741 6.3
 
Current assets Rs m 84,132 86,492 2.8
Fixed Assets Rs m 55,252 68,643 24.2
Total Assets Rs m 185,044 196,741 6.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HERO MOTOCORP

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 183.2, an improvement from the EPS of Rs 173.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,697.4, stands at 14.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 14.2 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 1,464.7
TTM Earnings per share Rs 173.6 183.2
Diluted earnings per share Rs 173.6 183.3
Price to Cash Flow x 13.4 14.2
TTM P/E ratio x 14.8 14.8
Price / Book Value ratio x 4.9 3.1
Market Cap Rs m 538,752 538,647
Dividends per share (Unadj.) Rs 87.0 90.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 84.6x 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 25.4% during FY20, from 26.4% 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 32.2% during FY20, from 38.8% 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 declined and down at 18.8% during FY20, from 18.9% 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 29 19
Interest coverage x 136.7 84.6
Debt to equity ratio x 0.0 0.0
Return on assets % 18.9 18.8
Return on equity % 26.4 25.4
Return on capital employed % 38.8 32.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 up from Rs 2,465.0 to Rs 2,697.4, registering a gain of Rs 232.4 or around 9.4%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 16,959.9 (up 1.9%). Over the last one year it has moved up from 15,652.9 to 16,959.9, a gain of 1,307 points (up 8.4%).

Overall, the S&P BSE SENSEX is up 2.6% over the year.

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

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Related Views on News

HERO MOTOCORP Announces Quarterly Results (1QFY21); Net Profit Down 95.1% (Quarterly Result Update)

Sep 10, 2020 | Updated on Sep 10, 2020

For the quarter ended June 2020, HERO MOTOCORP has posted a net profit of Rs 613 m (down 95.1% YoY). Sales on the other hand came in at Rs 30 bn (down 63.0% YoY). Read on for a complete analysis of HERO MOTOCORP's quarterly results.

HERO MOTOCORP Announces Quarterly Results (4QFY20); Net Profit Down 15.0% (Quarterly Result Update)

Jun 11, 2020 | Updated on Jun 11, 2020

For the quarter ended March 2020, HERO MOTOCORP has posted a net profit of Rs 6 bn (down 15.0% YoY). Sales on the other hand came in at Rs 62 bn (down 20.9% YoY). Read on for a complete analysis of HERO MOTOCORP's quarterly results.

HERO MOTOCORP 2018-19 Annual Report Analysis (Annual Result Update)

Jul 8, 2019 | Updated on Jul 8, 2019

Here's an analysis of the annual report of HERO MOTOCORP for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of HERO MOTOCORP. Also includes updates on the valuation of HERO MOTOCORP.

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