The company reported a 14.5 percent growth in its December quarter profit at Rs 880 crore versus Rs 769.1 crore in October-December of 2018.
The share price of Hero MotoCorp fell more than 2 percent to its five-year low at Rs 2191.65 in intraday trade on BSE on February 24 and looked on course to extend the losses into the seventh consecutive session.
The stock has been under pressure amid falling sales.
The company reported a 14.5 percent growth in its December quarter profit at Rs 880 crore versus Rs 769.1 crore in October-December of 2018.
Revenue from operations fell 11 percent YoY to Rs 6,996.7 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 6 percent to Rs 1,039 crore, but margin saw 80bps expansion YoY at 14.8 percent in December quarter due to lower raw material cost.
Brokerages believe in the near term, BS-VI transition remains a key challenge for the company.
"Hero Moto expects the BS4 inventory to be cleared before the end of March deadline. In February 2020, BS4 production was limited to 20 percent total production. However, given BS4 inventory is well over a month, likely that discounts will move up in March 2020. BS6 ramp-up remains a key challenge. The company expects down-trading due to BS6 price increase," brokerage firm JM Financial said in a report on February 20.
Morgan Stanley said it is underweight on the stock with a target price of Rs 2,143 per share.
According to Morgan Stanley, the auto original equipment manufacturers have high localisation rates but do get some components from China.
Shares of Hero MotoCorp were trading 1.75 percent down at Rs 2,200.80 on BSE at 1355 hours.
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