Hero MotoCorp, one of the largest two-wheeler makers, narrowly missed first-quarter profit estimates on Tuesday, hurt by weak average prices even as sales remained strong.
The company reported a standalone profit after tax of 1,123 crore rupees ($133.8 million) for the quarter ended June 30, up 36 percent from a year ago. Analysts, on average, had expected a profit of 1,178 crore rupees, according to LSEG data.
The standalone results do not include the business of its subsidiaries or associates, including Ather Energy and Hero FinCorp.
The company leads the Indian two-wheeler market with a share of nearly 30 per cent, and its closest rival is Japan’s Honda, which has a share of 28.4 per cent.
Hero’s average selling prices, or revenue per two-wheeler sold, rose 2 per cent to about Rs 66,000.
Amit Hiranandani, senior analyst for the auto sector at brokerage SMIFS, said the low average selling price could be due to lower sales of spare parts and lower export revenue. Exports account for around 3 per cent of Hero’s wholesale sales, according to previously released sales data.
However, in the domestic market, where its motorcycles like the Splendour and Deluxe are sought after, particularly in rural India, it has held strong.
Sales data released last month showed Hero shipped 12.7 per cent more units to dealers in the reported quarter, boosted by hopes of a good monsoon in the second half of the year, which would boost crop yields and hence farmers’ earnings.
The rural market accounts for a little over half of India’s total two-wheeler sales.
The company’s revenue rose 15.7 per cent to Rs 10,144 crore, though it also missed analysts’ estimate of Rs 10,541 crore.
Hero’s domestic sales had declined 2.7 percent in the same period a year earlier as a weak monsoon hit farmers’ income prospects.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.