Shares of Hero MotoCorp (HMCL) hit their 52-week low of Rs 2,478 in intraday trade on Tuesday after the country's largest two-wheeler manufacturer reported lower-than-expected earnings in March quarter amid muted growth of passenger vehicle sales.
The auto major has reported a 24.51 per cent decline in profit at Rs 730.32 crore in the fourth quarter ended March 31, 2019, as compared to Rs 967.4 crore in the same period last year. Revenues from operations slipped 8 per cent to Rs 7,885 crore in Q4 FY19, from Rs 8,564 crore in the year ago quarter.
For the full year 2018-19, the company reported 8 per cent decline in net profit at Rs 3,385 crore as compared to Rs 3,697 crore in the last financial year 2017-2018. Riding on its highest-ever sales of 78,20,745 units in a financial year, Hero MotoCorp clocked a revenue of Rs 33,651 crore for FY19, as compared to Rs 32,230 crore of FY18.
The financial result was announced after market hours on Friday, 26 April 2019. Indian equity markets were closed on Monday, 29 April 2019, on the eve of Lok Sabha elections in Mumbai.Reacting to Q4 earnings, Hero MotoCorp share price tumbled as much as 4.84 per cent to touch 52-week low of Rs 2,478 after opening lower at Rs 2,579.70 on the Bombay Stock Exchange. The stock closed trade at Rs 2,512.65, down 3.51 per cent. Data from BSE showed that there was a surge in volume trade with 0.73 lakh shares changed hand over the counter as compared to the two-week average of 0.38 lakh shares.
In a similar fashion, Hero MotoCorp share fell 3.80 per cent to settle at Rs 2,505.05 on the National Stock Exchange. The scrip opened tad lower at Rs 2,573 and touched an intra-day high and intra-day low of Rs 2,574 and Rs 2,477, respectively.
Global brokerage CLSA has retained its sell rating on Hero MotoCorp after March quarter earnings numbers and also lowered its target price to Rs 2,375 from Rs 2,400, citing muted demand outlook and margin concerns.
Analysts at Morgan Stanley retained its underweight call on Hero MotoCorp with a target price of Rs 2,459. The brokerage firm opined that the company's operating margin will remain under pressure due to competitive and regulatory pressures. The company, in its earnings report, raised concerns that the current fiscal (FY 2020) is expected to be yet another challenging year in view of the upcoming stringent emission norms of Bharat Stage (BS) VI.
Hero MotoCorp's Chairman, Pawan Munjal had said that the near-term prospect of the domestic two-wheeler market is likely to remain challenging, the festive season however is expected to brighten up sentiment and revive growth in the second half of FY20.
Hero sold 78.2 lakh units during FY19 as compared to 75.87 lakh units sold in previous year. On the quarterly basis, the auto major sold 17.81 lakh units in March quarter, lower from 20.01 lakh units sold in the same period last fiscal.
Edited by Chitranjan Kumar