Hero MotoCorp Q1 Results: Net profit increases by 36% to ₹1,123 crore

Hero MotoCorp reported a 36% increase in its standalone net profit for Q1 FY25, reaching ₹1,122.63 crore, up from ₹824.72 crore in the corresponding quarter of the previous year. The company's revenue from operations for the quarter stood at ₹10,144 crore, marking the first time Hero MotoCorp's operational revenue has exceeded ₹10,000 crore.

Hero MotoCorp Results Highlights

Hero MotoCorp announced on August 13 that its standalone net profit for Q1 FY25 increased by 36%, reaching ₹1,122.63 crore compared to ₹824.72 crore in the same quarter the previous year. This growth was fueled by robust sales, a recovery in the rural market, and new introductions in the 125cc segment, such as the Xtreme 125R. Despite this, the results fell short of market expectations.

On Wednesday morning, Hero Motocorp share price is trading at ₹5,059 on the NSE, reflecting a 3.56% decrease from the previous close on Tuesday.

The company, which is India's largest two-wheeler manufacturer, reported revenue from operations of ₹10,144 crore for the quarter, a 16% increase from ₹8,767 crore in the same period of the prior fiscal year. Notably, this marks the first time that Hero MotoCorp's revenue from operations has surpassed ₹10,000 crore.

A poll conducted by Moneycontrol, involving eight brokerage estimates, had projected Hero MotoCorp’s net profit for the first quarter at ₹1,190 crore and revenue at ₹10,520 crore. On a consolidated basis, the company's revenue and profit after tax (PAT) were ₹10,211 crore and ₹1,032 crore, respectively.

Additionally, the company's EBITDA (earnings before interest, taxes, depreciation, and amortization) rose by 21% to ₹1,460 crore in the previous quarter, with the operating margin increasing by 60 basis points to 14.4%.

The world's largest two-wheeler manufacturer noted positive trends across its domestic, electric vehicle (EV), and global businesses during the quarter. The company also observed a sequential improvement in retail sales (VAHAN). Hero MotoCorp expects this momentum to continue in the coming quarters, driven by positive customer sentiment, favorable monsoons, and the upcoming festive season. The company has a series of product launches planned in both the internal combustion engine (ICE) and EV categories.

Hero MotoCorp Management Commentary

Niranjan Gupta, Chief Executive Officer (CEO), commented on the results, stating, "We are witnessing a significant recovery in our market share in the 125cc segment, spurred by the new Xtreme 125cc model, while we continue to maintain a strong market share of over 70% in the entry and deluxe 100/110cc segments, supported by our popular brands like Splendor, Passion, and HF Deluxe."

Looking ahead, Hero MotoCorp is also targeting the premium segment. Gupta emphasized, "Our focus going forward will be on strengthening our brands in the premium segment, leveraging the launches made in recent quarters to capture this market. We will also be introducing new scooter models in the next two quarters to revitalize this portfolio."

Regarding EV sales, the CEO noted, "Our EV brand Vida is gaining traction and market share, and we plan to expand our portfolio into the affordable segment within this fiscal year. With favorable economic indicators and inclusive policies, along with increased capital allocation to infrastructure and the rural sector as announced in the union budget, demand is expected to strengthen. As inflationary pressures ease, consumer spending power is likely to rise, further boosting momentum as we approach the festive season."

Gupta concluded, "Overall, we are optimistic about the demand trajectory in the coming quarters. Our product launches and strategic initiatives are well-positioned to capitalize on this positive market environment, ensuring continued growth and value creation for all our stakeholders."

About Hero MotoCorp

Hero MotoCorp Ltd (Hero MotoCorp) is engaged in the manufacturing and marketing of motorized two-wheelers and their spare parts. The company offers a range of motorcycles and scooters across various engine capacities, including 100cc, 110cc, 125cc, 150cc, 200cc, and 225cc. Some of its key products include the Xpulse, Karizma ZMR, Xtreme Sports, and Glamour BS6. In addition to two-wheelers, Hero MotoCorp provides spare parts and offers support and maintenance services. 

The company operates an extensive network of dealerships, service and parts outlets, dealer-appointed outlets, and state-of-the-art manufacturing facilities located in India, Colombia, Germany, and Bangladesh. Hero MotoCorp’s products are distributed to customers across Asia, Africa, and South and Central America. The company is headquartered in New Delhi, India.