Hero MotoCorp, world's largest two-wheeler manufacturer, reported an 8.99 per cent year-on-year increase in standalone profit after tax during the September quarter as sales recuperated from the dismal lows of first quarter of this fiscal. The motorcycle manufacturer posted a net profit after tax of Rs 953.45 crore during the quarter under review, up from Rs 874.80 crore in the corresponding quarter last year and significantly higher than Rs 61.31 crore in the June quarter of this fiscal.
The Indian two-wheeler major sold 18.22 lakh units during the quarter ended September 30, 2020, as buyers returned to dealerships with gradual lifting of lockdown measures and rise in preference for personal vehicles amid the coronavirus pandemic. The company had sold 16.91 lakh units during September quarter last fiscal, and only 5.65 lakh units during June quarter this fiscal when dealerships were closed due to COVID-19-mandated lockdown.
Hero MotoCorp's revenue from operations for the second quarter of this fiscal stood at Rs 9,367.34 crore, growing 23.7 per cent from Rs 7,570.70 crore in the year-ago period. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the September quarter of FY21 stood at Rs 1,286 crore, as opposed to Rs 1,101 crore in the same period during FY20, reflecting growth of 16.8 per cent. EBITDA margin in Q2 FY21 stood at 13.7 per cent as compared to 3.6 per cent in the Q1 FY21.
The key earnings reflect a good performance based on improving economy and strong product line-up, combined with rationalisation of expenses and extensive cash-preservation measures, the company said in a stock exchange filing.
Commenting on company's financial performance in the September quarter, Hero MotoCorp's Chief Financial Officer Niranjan Gupta said that the momentum is expected to continue into the festive, "which has started well for us." The company has registered significant gains in market share during the second quarter across products and geographies and expects to maintain the lead through our well-positioned product portfolio, he further added.
"The earnings in the second quarter of FY21 reflect a strong performance, signalling a gradual revival from the negative impact of the global pandemic. The recovery in demand to pre-COVID levels, credible resumption of supply chain and logistics, cost and cash management, along with judicious price increase, has helped deliver profitability," Gupta said.
Earlier today, before the earnings announcement, Hero MotoCorp share closed 33.10 points, or 1.14 per cent higher, at Rs 2,945.80 on BSE.