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Result Reviews
Hero MotoCorp
Hero MotoCorp (HMCL) reported better-than-expected results for 2QFY2012,
aided by strong volume performance on the domestic front and expansion in
its operating margin. Net sales for the quarter registered in-line growth of
28.1% yoy (2.6% qoq) to `5,829cr, led by volume growth of 20.1% yoy
(1% qoq) and a 6.8% yoy (1.6% qoq) increase in average net realization.
HMCL posted its highest-ever volume performance in 2QFY2012 on the back
of a 19.3% and 32% yoy increase in motorcycle and scooter sales,
respectively. Net average realization improved to `37,456/vehicle, driven by
price increases and improved product mix.
The company’s EBITDA margin (adjusted for change in accounting for royalty
payments) came in above expectations at 12.7%, reporting an expansion of
145bp qoq, primarily due to lower raw-material expenses. Other operating
expenses, however, increased by ~70bp qoq, probably on account of higher
advertising and marketing spend. Led by better-than-expected operating
performance and lower tax rate, net profit registered strong growth of 19.4%
yoy (8.2% qoq) to `604cr.
We believe at the CMP of `1,985, HMCL is fairly valued at 15.4x FY2013E
earnings (historical multiple – 15x). Thus, we maintain our Neutral rating on
the stock. We shall come up with a detailed result update post the earnings
call with management.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Reviews
Hero MotoCorp
Hero MotoCorp (HMCL) reported better-than-expected results for 2QFY2012,
aided by strong volume performance on the domestic front and expansion in
its operating margin. Net sales for the quarter registered in-line growth of
28.1% yoy (2.6% qoq) to `5,829cr, led by volume growth of 20.1% yoy
(1% qoq) and a 6.8% yoy (1.6% qoq) increase in average net realization.
HMCL posted its highest-ever volume performance in 2QFY2012 on the back
of a 19.3% and 32% yoy increase in motorcycle and scooter sales,
respectively. Net average realization improved to `37,456/vehicle, driven by
price increases and improved product mix.
The company’s EBITDA margin (adjusted for change in accounting for royalty
payments) came in above expectations at 12.7%, reporting an expansion of
145bp qoq, primarily due to lower raw-material expenses. Other operating
expenses, however, increased by ~70bp qoq, probably on account of higher
advertising and marketing spend. Led by better-than-expected operating
performance and lower tax rate, net profit registered strong growth of 19.4%
yoy (8.2% qoq) to `604cr.
We believe at the CMP of `1,985, HMCL is fairly valued at 15.4x FY2013E
earnings (historical multiple – 15x). Thus, we maintain our Neutral rating on
the stock. We shall come up with a detailed result update post the earnings
call with management.
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