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Hero MotoCorp, India's largest two-wheeler manufacturer, reported a strong performance in the second quarter of the current financial year (Q2 FY25), exceeding market expectations with a 14% increase in net profit. The company's net profit reached Rs 1,203.54 crore in the quarter ending September 30, 2024, compared to Rs 1,053.81 crore in the same period last year. Analysts had projected a net profit of Rs 1,156 crore for the quarter.
The company's revenue from operations also saw a significant jump, climbing 11% to Rs 10,463.21 crore in Q2 FY25, compared to Rs 9,445.43 crore in the corresponding period of the previous financial year. Notably, Hero MotoCorp achieved its highest-ever quarterly revenue from parts, accessories, and merchandise, reaching Rs 1,456 crore in the quarter.
The company's EBITDA (Earnings before interest, tax, depreciation, and amortization) margin for the quarter expanded by 40 basis points year-on-year to 14.5%. This positive performance reflects the company's focus on cost optimization and operational efficiency.
Niranjan Gupta, Chief Executive Officer (CEO) of Hero MotoCorp, attributed the strong performance to the company's commitment to cash management, resulting in robust cash flow and a strengthened financial position. He highlighted the company's exceptional performance in Q2 FY25, achieving new highs in both topline and bottomline.
Sales of two-wheelers in Q2 FY25 increased by 7.3% to 15.20 lakh units, compared to 14.16 lakh units in the same period last year. The company's existing lineup of brands continues to perform well in the entry and deluxe segments (up to 125 cc). However, Hero MotoCorp is actively working on strengthening its portfolio at the premium end of the market and plans to launch three more motorcycles in this segment over the next six months.
Furthermore, Hero has lined up three more petrol scooters and more affordable electric vehicles for launch later in the fiscal year. The company is also focusing on expanding its premium dealership network, aiming to reach 100 Premia stores by the end of the current fiscal year. Gupta emphasized that the strong financial position will enable the company to aggressively invest in brand building.
Hero MotoCorp reported its highest-ever retail sales of 16 lakh units during the recent festive season, fueled by increased demand from the rural sector. The company believes that the favorable monsoon will support the momentum in the industry going forward. Gupta expressed optimism about the fundamentals of the Indian economy and the two-wheeler industry in particular.
Shares of Hero MotoCorp closed at Rs 4604.30 on the Bombay Stock Exchange (BSE), up by 1.84%. The company's strong financial performance and growth plans have positively impacted investor sentiment, reflected in the stock's rise.
Source: Hero MotoCorp Q2 Results: Co beats Street estimates to report 14% rise in profit