In This Article:
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Quarterly Revenue: INR10,211 crores, a growth of 5%.
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EBITDA: INR1,476 crores, a growth of 8%.
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Profit After Tax (PAT): INR1,203 crores, a growth of 12%.
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Revenue from Parts, Accessories, and Merchandise: INR1,555 crores, a year-on-year growth of 9%.
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EBITDA Margin for ICE Business: 16%.
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Overall EBITDA Margin: Improved by 50 basis points to 14.5% year-on-year.
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Interim Dividend: INR100 per share.
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Market Share: Expanded by 520 basis points quarter-on-quarter to 32.8%.
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Retail Units: Highest ever retail of more than 2 million units in the quarter.
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Investment in EV Business: INR137 crores.
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hero MotoCorp Ltd (BOM:500182) reported a 12% increase in bottom-line profits for Q3 FY25.
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The company achieved its highest ever revenue and profits for the year-to-date nine months.
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EBITDA per unit crossed INR10,000, driven by premiumization, mix, and judicious pricing.
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Market share expanded by 520 basis points quarter-on-quarter to 32.8%, with strong performance in the Deluxe 125 segment.
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The company declared an interim dividend of INR100 per share, reflecting strong financial health.
Negative Points
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Despite strong rural demand, the motorcycle category is losing market share to scooters and mopeds.
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Hero FinCorp reported increased credit costs and lower collection efficiency, impacting profitability.
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The EV business faced a temporary decline in dispatches due to transitioning from V1 to V2 models.
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There is a concern about the pricing strategy for new products like the Xoom 160, which may prioritize profitability over market share gains.
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The company faces challenges in expanding its EV market presence, with current market share not reflecting potential due to limited geographical and price segment coverage.
Q & A Highlights
Q: This quarter, we have seen strong growth in parts revenues. Is there a seasonality here, and how should we think about this going forward? A: Yes, the strong growth in parts revenues is part of the Q3 seasonality. There are additional lines of business contributing, such as tires, batteries, and oils. This growth is driven by consistent execution, distribution expansion, and rural market penetration. Profitability in the parts business remains strong. - Ranjivjit Singh, Chief Business Officer, India Business Unit
Q: Can you explain the pricing strategy for the Xoom 160 scooter, given it's a new category? A: The Xoom 160 is priced competitively, considering the features it offers, such as a liquid-cooled engine and 14-inch wheels. Our goal is to grow the category substantially, and we expect the pricing to reflect the value provided. - Ashutosh Varma, National Sales Head