HERO MOTOCORP (FORMERLY HERO HONDA) = RESULTS FOR Q2 FT 12 =SEP,2011 = EXCELLENT PERFORMANCE = NPT UP 8.2%QOQ;19.39%YOY.=3RD QTR SALES EVEN BETTER

Hero MotoCorp Limited

RESULTS FOR Q2 FY 12

 ENDING SEP,2011

Hero MotoCorp Ltd (formerly Hero Honda) has announced very good results for the 2^nd quarter ending Sep,2011.

Net Sales stands at Rs.5784.32 cr in Q2 FY 12 – compared to Rs.5637.64 cr in Q1 FY 12 (Up by 2.6%) – and Rs.4511.29 cr in Q2 FY 11 (Up by 28.22%).

Raw Materials stands at Rs.4263.97 cr in Q2 FY 12 – compared to Rs.4241.43 cr in Q1 FY 12 (Up by 0.53%) and Rs.3385.74 cr in Q2 FY 11 (Up by 25.94%).

Total Expenditure stands at Rs.5189.10 cr in Q2 FY 12 – compared to Rs.5105.36 cr in Q1FY 12 (Up by 1.64%) – and Rs.4004.76 cr in Q2 FY 11 (Up by 29.57%).

Profit from Operations stands at Rs.640.22 cr in Q2 FY 12 – compared to Rs.577.97 cr in Q1 FY 12 (Up by 10.77%) – and compared to Rs.547.19 cr in Q2 FY 11 (Up by 17%).

Profit  before tax amounts to Rs.724.46 cr in q2 FY 12 – compared to Rs.669.57 cr in Q1 FY 12 (Up by 8.2%) – and compared to Rs.627.61 cr in Q2 FY 11 (Up by 15.43%).

Net Profit stands at Rs.603.62 cr in Q2 FY 12 – compared to Rs.557.89 cr (Up by 8.2%) and Rs.505.60 cr in Q2 FY 11 (Up by 19.39%).Sales and Net Profits have gone up both QOQ and YOY reasonably well – which is heartening.

On a Face Value of Rs.2, Basic EPS stands at Rs.30.23 in Q2 and Rs.27.94 in Q1. Of current year. At this rate annual EPS could be around Rs.116 – which is quite impressive.

Current Market Rate is Rs.1809.70; with the 52 week high price  at Rs.2249 and 52 week low price Rs.1375.75.

The Price Earnings Ratio comes to 15.6 – which is very LOW for hero Motorcorp. In a normal market, Hero must have much higher valuations.

Other Highlights :

Sales for Q2 FY 12 stands at 15,44,315units, a growth of  20%.

Over 3 mln units were sold in H1 FY 12, a growth of 22%.

EBIDTA margin for the quarter is at 15.76%.

Hero Motocorp says – that it has begun its New Journey with a record top line and bottom line performance.

After unveiling its new Global Brand identity in London on August 9^th this year, it has notched up the highest ever monthly sales of 549,625 units in September. The company has launched its first Motor cycle under the “Hero” Brand name. The “Impulse” 150 cc is the country’s only dual-purpose on-road-off-roadbike-launching a new segment in Indian two wheeler market.

Clearly, Hero has started its New Brand strategy excellently and is slated to scale new heights.

We can see from the Press release synopsis below that Q3 FY 12 could be just as exciting as the Q2 Results reviewed above.

It is therefore a Good bet for Investment for Medium to long term Investors.

PRESS RELEASE SYNOPSIS

New Delhi, January 2, 2012:

Established an industry landmark, reporting its highest-ever sales for a calendar year – the first full year since embarking on its new journey.

sold record 6,117,599 units in January-December 2011, a growth of 19.2% over 2010 when it had sold 5,134,549 two-wheelers.

sold 540,276 units in December 2011, a growth of 7.8 per cent over the corresponding month of the previous year when the company had sold 501,111 units.

Q3 of FY’12 (October – December’11) also reported the most successful quarter with sales of 15,89,276 units, up by 11.3% over corresponding quarter in FY’11, when the company had sold 14,28,030 units.

cumulative sales in the period April-December 2011, has now risen to 46,63,168 units, a 18.1% growth over corresponding period last year (April-December’10) when the company had sold 39,47,713 units.

Year 2011 was most significant for Hero MotoCorp as it took a big leap by launching its new global and independent brand identity. ‘Hum Mein Hai Hero’, the re-branding campaign was an instant success, gained immense popularity and established Hero MotoCorp Ltd. as a strong entity.

On the new product front, this year saw an impressive addition to an already strong product portfolio of the company. Earlier this year, Hero MotoCorp launched refreshed models of Glamour and Glamour FI to further strengthen leadership in the deluxe segment. The company also introduced the refreshed version of Karizma ZMR. The festive season witnessed launch of Impulse, thereby launching an entirely new segment in the Indian two-wheeler market.

Hero MotoCorp received several awards for its first Hero branded on-and-off road bike, the Impulse. Apart from clinching the ‘Best Motorcycle up to 150 cc category” by NDTV Car & Bike Awards 2012, the trans-roader also won 2011 ET Zigwheels Bike of the Year award.

Hero MotoCorp was also yet again ranked No 1 brand in the Auto (two-wheelers) category in the Brand Equity “Most Trusted Brand” 2011 survey.

Hero MotoCorp also received accolades for its highly-innovative rebranding initiative. This initiative won the CNBC Awaaz-Storyboard special commendation for “Effective rebranding of a new corporate entity” at the CNBC Awaaz Consumer Awards 2011. The company also won the “Most Recommended Two-Wheeler Brand of the Year” award at the same awards.

RESULTS TABLE

HeroMotoCorp	30-Sep-11	30-Jun-11	%DIF	30-Sep-10	%DIF
Net Sales	578432	563764	2.6	451129	28.22
Other Oprting Income	4500	4569	-1.51	4066	10.67
Increase in SIT/WIP	-4023	332	-1311.8	-7572	-46.87
Raw Materials	426397	424143	0.53	338574	25.94
Employees Cost	17937	16452	9.03	14982	19.72
Depreciation	27849	23979	16.14	6075	358.42
Other Expenditure	50750	45630	11.22	48417	4.82
Total Expenditure	518910	510536	1.64	400476	29.57
Profit from Operations	64022	57797	10.77	54719	17
Other Income	7975	8841	-9.8	7835	1.79
Interest	-449	-319	40.75	-207	116.91
Profit  before tax	72446	66957	8.2	62761	15.43
Tax expense	12084	11168	8.2	12201	-0.96
Net Profit	60362	55789	8.2	50560	19.39
Face Value (In Rs	2	2	0	2	0
Paid Up Equity	3994	3994	0	3994	0
Basic EPS	30.23	27.94	8.2	25.32	19.39
Public Holding (%)	0	47.79	-100	47.79	-100

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