Hero MotoCorp Q2 profit rises 0.6%, operating margin beats estimates

Moneycontrol News

Two-wheeler major Hero MotoCorp has reported profit growth of 0.6 percent year-on-year for the quarter, backed by volume growth and operational performance.

Profit for the quarter stood at Rs 1,010.5 crore against Rs 1,004.2 crore in corresponding quarter last fiscal.

Revenue during the quarter grew by 7.3 percent year-on-year to Rs 8,362 crore, with a 11 percent increase in sales volumes.

"Net revenue from operations on like-for-like basis (adjusted for GST accounting change on Haridwar sales) has grown by 11.5 percent over corresponding period last year," Hero said.

It has recorded highest-ever quarterly sales of 20,22,805 units, a growth of 10.9 percent over same quarter last fiscal.

EBITDA (earnings before interest, tax, depreciation and amortisation) increased 6.3 percent to Rs 1,455.7 crore but margin contracted 20 basis points to 17.4 percent compared with a year ago quarter.

"The effective tax rate for the quarter is higher on account of phasing out of investment allowance and reduction in allowable deduction of R&D expenditure leading to lower PAT growth versus EBIDTA growth," the company said.

Tax expenses increased 7.3 percent year-on-year to Rs 425.22 crore in Q2.

Numbers were mixed for the quarter. Profit was estimated at Rs 1,035 crore on revenue of Rs 8,717 crore for the quarter while operating income was expected at Rs 1,444 crore and margin at 16.6 percent, according to average of estimates of analysts polled by CNBC-TV18.

The stock price of Hero Motocorp that announced earnings after market hours, closed down 0.82 percent at Rs 3,823 on the BSE.