Company Update : Hero Motocorp Ltd By Motilal Oswal Financial Services Ltd
Operationally in line; PAT beat driven by higher other income
* Net realizations declined 1% YoY/ -4% QoQ to INR66.1k (est. INR69.2k). Volumes grew 6% YoY and 2% QoQ.
* Net revenues grew ~5% YoY to INR102.1b (est. INR101.3b).
* Gross margins expanded 160bp YoY (+ 90bp QoQ) to 34.2% (est. 33.4%), owing to lower commodity costs and a favorable mix.
* This resulted in a better EBITDA margin at 14.5% (+50bp YoY/ flat QoQ, est. 14%). EBITDA grew 8% YoY to INR14.8b (est. INR14.2b).
* Further, higher other income boosted adj. PAT growth, which grew 12% YoY to INR12b (est. INR11.1b).
From the PR
* The company reported a market share of 29.6% in 3QFY25, up from 29% in 2QFY25 (30.5% in 3QFY24).
* Inventory level in 3QFY25 stood at six weeks (vs 10-11 weeks in 2QFY25 and 5-6 weeks in 3QFY24).
* EVs: Market share rose 1.5% YoY to 4.7% in Q3FY25; highest-ever retails of ~7k recorded in Oct and Nov.
* Valuation: The stock trades at 17.6x/16.3x FY26E/FY27E EPS.
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