Hero MotoCorp, the world's largest two-wheeler manufacturer, is set to announce its financial results for the September quarter of FY25 (Q2FY25) on Thursday, November 14, 2024. Domestic brokerages anticipate robust year-on-year (Y-o-Y) growth in both revenue and profitability, driven by factors such as volume increases, improved realisations, and a favourable product mix. Investors looking to invest in stocks may want to keep an eye on the upcoming earnings report, as strong performance is expected to continue.
Revenue and profitability growth expected
Hero MotoCorp's Q2 results are expected to show solid Y-o-Y growth. Analysts forecast that the company's revenue will rise by 7% to 9%, driven by gains in premium segment volumes, particularly the 125cc bikes. The growth in the company's premium segment is set to be a key driver in the upcoming quarter. As a result, investors considering share market investment might find these projections appealing. Additionally, the company is expected to see improvements in its EBITDA (earnings before interest, tax, depreciation, and amortisation) margins due to effective pricing strategies and cost management.
Projected revenue and net profit figures
For Q2FY25, analysts project Hero MotoCorp's revenue to range between ₹10,132.5 crore and ₹10,274.2 crore, reflecting a 7% to 9% Y-o-Y growth. The projected increase in revenue is indicative of the company's ability to maintain momentum, which could be an attractive point for those interested in share market investment.
Hero MotoCorp's net profit (PAT) for Q2 is expected to grow by up to 10.7%. Despite a cautious demand outlook, the company's continued success in growing its premium bike volumes and managing its costs has led to optimistic projections. The company's stellar performance during the festive season, with a 17.4% Y-o-Y increase in domestic sales, further strengthens the expectation of strong profit growth. Analysts predict that PAT will rise from ₹1,145.5 crore to ₹1,166.2 crore, reflecting growth between 6.9% and 10.7% Y-o-Y.
Performance on the stock market
While Hero MotoCorp shares have fallen over 3% in the past six months, they have seen a 15% increase year-to-date (YTD). On November 12, 2024, Hero MotoCorp's stock closed 0.80% lower at ₹4,718.10 per share, in line with a wider market trend, as the BSE Sensex finished 1.03% lower at 78,675.18. Despite recent volatility, Hero MotoCorp's stock has performed well in 2024, indicating the market's confidence in its long-term potential. For those considering share market investment, Hero MotoCorp presents a balanced mix of growth potential and short-term volatility.
Revenue growth forecasts from analysts
Based on current trends, analysts project Hero MotoCorp's revenue for Q2FY25 to be ₹10,132.5 crore, reflecting a 7% increase Y-o-Y. They also predict EBITDA at ₹1,458.9 crore, up 10% Y-o-Y, and adjusted profit after tax (PAT) at ₹1,145.5 crore, a 9% rise Y-o-Y. This indicates a steady trajectory of growth, further positioning Hero MotoCorp as an attractive stock in the share market investment space.
Expectations for volume growth
Hero MotoCorp is also expected to see volume growth, with analysts predicting an 8% Y-o-Y increase in volumes. The volume growth is partly attributed to a low base from the previous year. The increase in the sales of higher-displacement bikes has significantly contributed to this growth, suggesting that Hero MotoCorp has successfully catered to a growing demand for premium models.
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