Hero MotoCorp shares drop 4% post Q1 results

Shares of Hero MotoCorp, India’s largest two-wheeler maker by volume, fell 4.26% on Wednesday after the company’s first-quarter net profit of ₹1,123 crore missed analyst estimates.

The stock hit a low of ₹5,017 on the BSE, taking the company’s market cap to around ₹1 lakh crore.

Revenue from operations crossed the ₹10,000 crore mark for the first time in the June quarter. Hero MotoCorp reported a revenue of ₹10,144 crore in Q1 FY25 compared to ₹8,767 crore in the year-ago period, reflecting a growth of 16%.

EBITDA margin expanded over the previous year and stood at 14.4% in Q1 FY25.

Hero MotoCorp says it witnessed positive trends across domestic, electric vehicles (EV) and global businesses during the quarter. The company also witnessed sequential improvement in retail sales (VAHAN). It expects the momentum to build up in the following quarters on account of positive customer sentiments, good monsoons and the upcoming festive season. The company has a slew of product launches planned in both ICE and EV categories.

“We continue to be on the profitable growth journey, crossing ₹10,000 crore revenue for the first time ever, accompanied by highest ever underlying PAT. As we surge forward, we are investing behind long term capability building to ensure sustained delivery of growth in future,” says Niranjan Gupta, chief executive officer (CEO), Hero MotoCorp.

“We are seeing a sharp recovery in market share in 125 cc segment charged by the new model Xtreme 125 cc, while we continue to maintain formidable market share in entry and deluxe 100/110 cc segment of over 70% powered by our brands like Splendor, Passion, and HF deluxe,” says Gupta. “Our focus moving forward will be, building our brands in premium segment on the back of launches done in last few quarters, to win in this segment,” he adds.

The two-wheeler maker plans to launch new models in scooters in the next two quarters to re‐energise this portfolio.

“We have seen now our EV brand Vida starting to increase its presence and market share, and we will be expanding portfolio into affordable segment within this fiscal,” Gupta says.

The overall economic indicators in India are promising, and the inclusive policies as well as capital allocation to infrastructure and rural sector announced in the Union budget is expected to bolster demand, the Hero MotoCorp CEO says. “With inflationary pressures easing, consumer spending power is set to rise, further driving momentum as we gear up for a big festive season ahead,” he says.

The company says it is optimistic about the demand trajectory for the coming quarters. “Our product launches and strategic initiatives are well‐aligned to capitalise on this positive market environment, ensuring continued growth and value creation for all our stakeholders,” says Gupta.