Hero Motocorp Q1 results

Hero MotoCorp Q1 FY25: 36% Profit Boost Powered by Sales and New Launches

Hero MotoCorp, India’s largest two-wheeler manufacturer, announced its Q1 FY25 results on August 13, revealing a significant 36% increase in standalone net profit to ₹1,122.63 crore. This growth was fueled by robust sales, a recovery in the rural market, and successful launches in the 125cc segment, including the Xtreme 125R. Despite this positive performance, the results fell short of market expectations.

Financial Performance Overview

Hero MotoCorp’s revenue from operations for the quarter reached ₹10,144 crore, marking a 16% increase from ₹8,767 crore in the same period last year. Notably, this is the first time the company’s revenue from operations surpassed the ₹10,000 crore mark, a significant milestone for the automaker.

However, the company’s financial results did not fully meet Street estimates. A Moneycontrol poll of eight brokerage estimates had predicted a net profit of ₹1,190 crore and revenue of ₹10,520 crore. In consolidated terms, Hero MotoCorp reported a revenue of ₹10,211 crore and a profit after tax (PAT) of ₹1,032 crore for the quarter.

The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 21% to ₹1,460 crore, with the operating margin expanding by 60 basis points to 14.4%. This improvement in profitability reflects the company’s effective cost management and operational efficiency.

Market and Segment Performance

1. 125cc Segment Recovery

Niranjan Gupta, Hero MotoCorp’s CEO, highlighted the strong recovery in market share within the 125cc segment, driven by the introduction of the Xtreme 125R. The company’s formidable market presence in the entry and deluxe 100/110cc segments remains strong, with over 70% market share, supported by popular models like Splendor, Passion, and HF Deluxe.

2. Premium Segment Focus

Hero MotoCorp is also intensifying its focus on the premium segment. Gupta emphasized that the company is committed to building its brands in this segment, leveraging recent launches to capture more market share. The automaker has new models in the scooter segment slated for launch in the next two quarters, aiming to rejuvenate its product portfolio.

3. EV Segment Growth

In the electric vehicle (EV) segment, Hero MotoCorp’s EV brand Vida is gaining traction. Gupta mentioned that the company plans to expand its EV portfolio into more affordable segments within this fiscal year. The positive economic indicators in India, coupled with supportive government policies and capital allocation to infrastructure and the rural sector, are expected to bolster demand in the coming quarters.

Hero Motocorp Q1 results

CEO’s Commentary and Strategic Outlook

Niranjan Gupta, CEO of Hero MotoCorp, provided an optimistic outlook for the company’s future, stating, “We are seeing a sharp recovery in market share in the 125cc segment, charged by the new model Xtreme 125R, while we continue to maintain formidable market share in the entry and deluxe 100/110cc segment of over 70%, powered by our brands like Splendor, Passion, and HF Deluxe.”

He further added, “Our focus moving forward will be on building our brands in the premium segment on the back of launches done in the last few quarters, to win in this segment. We will be launching new models in scooters as well in the next two quarters to re-energize this portfolio.”

Regarding the EV segment, Gupta commented, “We have seen our EV brand Vida starting to increase its presence and market share, and we will be expanding the portfolio into the affordable segment within this fiscal. Hero Motocorp Q1 results, The overall economic indicators in India are promising, and the inclusive policies as well as capital allocation to infrastructure and the rural sector announced in the union budget are expected to bolster demand. With inflationary pressures easing, consumer spending power is set to rise, further driving momentum as we gear up for a big festive season ahead.”

Future Prospects and Market Dynamics

Hero MotoCorp remains optimistic about the demand trajectory in the coming quarters. The company’s strategic initiatives, including new product launches and expansion into the premium and EV segments, are well-aligned to capitalize on the positive market environment. The upcoming festive season, coupled with favorable economic conditions, is expected to drive further growth and value creation for all stakeholders.

Conclusion

Hero MotoCorp’s Q1 FY25 results show solid growth with a 36% profit increase driven by strong sales and new launches, particularly in the 125cc segment. However, the results fell short of market expectations, indicating room for improvement. Hero Motocorp Q1 results, The company remains optimistic about future growth, focusing on expanding its premium and EV segments, supported by favorable economic conditions and upcoming product launches.