Hero MotoCorp Q2 preview: Profit, sales may see double-digit growth; margin may expand up to 60 bps

NEW DELHI: Two-wheeler maker Hero MotoCorp is all set to report a double digit growth in September quarter profit. Net sales for the automaker are seen rising 20-25 per cent during the same period, thanks to a strong entry-level portfolio and robust rural demand recovery. Margins are seen expanding 30-60 basis points on a yearly basis, analysts said.

Sharekhan expects the automaker to report a 11.4 per cent YoY rise in profit at Rs 1024.20 crore compared with 919.80 crore profit in the same quarter last year. Sales are seen rising 22.6 per cent to Rs 9,283.60 crore from Rs 7,570.70 crore YoY. Ebita margin is seen expanding to 15.1 per cent from 14.5 per cent in September quarter of last year.

For the quarter, Hero MotoCorp reported a 7 per cent YoY rise in volumes at 18,15,000 units.

"Volumes were driven by improved consumer sentiment and channel filling ahead of the festive season. Realisations are likely to grow 14 per cent YoY due to the price hikes on account of BS-VI emission norms.Lower other income and higher taxation will lead to 11 per cent profit growth," it said.

Motilal Oswal Securities sees profit at Rs 1,042.30 crore, up 13 per cent YoY. This brokerage sees sales rising 24.9 per cent to Rs 1,371 crore and margins expanding to 14.8 per cent from 14.5 per cent.

HDFC Institutional Equities, meanwhile, is expecting the two-wheeler maker to report flat profit at Rs 920 crore, even as it sees sales rising 25 per cent to Rs 9,440 crore. All eyes would be on the market share trends in the premium segment post the launch of the Xtreme 160cc bike, current inventory levels and any commentary on festive season sales.