Girish Pai

Nirmal Bang

Equity Bottom-Up

<p>4QFY21 Result Update</p>
<h2>Hero MotoCorp</h2>
<h3>Strong results; price hikes and cost savings offset RM headwinds</h3>
<p>Hero MotoCorp (Hero) reported EBITDA of Rs12.1bn, which was 11% higher than our estimate, led by strong revenue growth (+4% vs. our estimate) and improved profitability (EBITDA margin of 13.9% vs. our estimate of 13%). The company mentioned that judicious price hikes and accelerated benefits from the “Leap” cost saving program (+300bps in 4QFY21 and +200bps for FY21) aided profitability. The…</p>

<p>3QFY21 Result Update</p>
<h2>Hero MotoCorp</h2>
<h3>Macros in place; Focus on ‘Leap’ to mitigate RM cost pressures</h3>
<p>Hero MotoCorp (Hero) reported higher-than-expected 3QFY21 adjusted net profit of Rs10.85bn, up 23% YoY, driven by a better operating performance. Reported EBITDA margin declined by 30bps YoY to 14.5% largely due to BS-VI cost impact and higher RM costs, partially offset by ~100bps cost savings from the Leap program. Hero took a price hike of 1-2% across products in Oct’20 and will take a judicious…</p>

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<p>2QFY21 Result Update</p>
<h2>Hero MotoCorp</h2>
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<h3>Personal mobility and rural sentiments continue to support demand</h3>
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<p>Hero MotoCorp (Hero) reported lower-than-expected 2QFY21 adjusted net profit of Rs9.5bn, up 2% YoY, driven by better operating performance. Reported EBITDA margin declined by 80bps YoY to 13.7% largely due to BS-VI cost impact and higher employee costs to bring back the migrant labors. Cash flow generated in 2QFY21 stood at over Rs30bn on efficient working capital management. As per…</p>
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<p>1QFY21 Result Update</p>
<h2>Hero MotoCorp</h2>
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<p><strong>Personal mobility and rural recovery remain structural positives</strong></p>
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<p>Hero MotoCorp (Hero) reported better-than-expected 1QFY21 net profit of Rs613mn, down 88% YoY, driven by better operating performance and lower tax expense. Reported EBITDA margin declined by 1080bps YoY to 3.6%. Lockdown period cost was Rs2.5bn. Adjusting for this, EBITDA margin was ~12%. Cash flow generated during 1QFY21 stood at over Rs10bn. As per the management, shift away from…</p>
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India

Hero MotoCorp Ltd. designs, manufactures and distributes motorcycles. The Company's products also include motorcycle parts and accessories.

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