Hero MotorCop Limited Research Report

Q3 FY 2022 Review

Hero MotorCop Ltd. (HMCL) Q3’FY22 reported net revenue Of Rs.7,883 Cr, declining by 7% QoQ Compared to Rs. 8453 cr in Q2’FY22, led by de-growth in volume by 9%. The Company EBITDA stood at Rs. 960 cr in Q3’FY22 is declined by 10% as compared to Rs. 1066 Cr reported in Q2’FY22. EBIT and Net Profit reported Rs. 911 cr and Rs.686 cr in Q3’FY22 compared to Rs.1053 cr and Rs.794 In Q2’FY22 which has shown de-growth in QoQ by 7% & 13% respectively.

Hero MotorCop Limited - Investment Summary

Hero MotorCop Limited - Overview

• Hero Motorcop (HMCL) is the world’s largest 2-W manufacturer by volume, with a domestic market share at 34.5% today. Its popular model includes Splendor, Passion, Glamour etc.

• Out of 34.5%, the market penetration of HMCL in rural areas is 53%; but only 48% of sales are generated from rural regions.

• HMCL is virtually debt-free and maintains a healthy dividend payout ratio of more than 50% on an average every year.

• EV development continues to progress through its investment and partnership with Ather Energy and Gogoro Inc, followed by a collaboration with Harley Davidson is also in progress for premium motorcycle segment.

Hero MotorCop Limited - Relative Performance

Hero MotoCorp Limited - Quarterly Summary

Business Overview

• Hero MotoCorp Limited, formerly (Hero Honda), is an Indian multinational motorcycle and scooter manufacturer headquartered in New Delhi. The company is the largest two-wheeler manufacturer globally and also in India, where it has a market share of about 34.5% in the two-wheeler industry.

• By December 2010, the board of directors of the Hero Honda Group had decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.

• The company’s name was changed from Hero Honda Motors Limited to Hero MotoCorp Limited on 29 July 2011.•

• In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a motorcycle sport company that produced street and racing motorcycles based in East Troy, Wisconsin, United States. EBR filed for bankruptcy in 2015,] and Hero MotoCorp proceeded to acquire certain assets for ₹18.2 crores.

• HMCL business segments include:

  • Motorcycle Segments:

    • Xtreme 200S, Xtreme 160R.

    • Xpulse 200T, Xpulse 200 4V, Xpulse 200.

    • Splendor Ismart, Splendor+, New Super Splendor, Passion pro.

    • Glamour, New Glamour, Glamour XTec.

  • Scooter Segment:

    • Pleasure+ XTEC, New Maestro Edge 125, New Maestro Edge 110.

    • Destini 125 XTEC, Destini 125.

Ratio Analysis: