HERO
MOTOCORP LTD
 |
| PAWAN MUNJAL MD & CEO |
RESULTS FOR Q2 FY 2013
SEP. 2012
HIGH LIGHTS
o
Profit After Tax of Rs. 441 Crore. (against net
profit at Rs 603.62 crore in the July-September quarter of last financial
year).
o
Turnover of Rs. 5187 Crore in Q2 FY 13 (JUL-SEPT),
FY’13
o Operating
margin falls to 13.86 pct from 15.8 pct YoY, down from 15.76 % in Q2 FY 12 and
15% in Q1 FY 13.
o Kicks-Off
Festive Season With Over 2-Lakh Retail Sales In Navarathras in October
o Commences
Despatch Of 110CC PASSION X PRO
o Sells
close to 3 million two-wheelers in H1 (Apr-Sept)
o Sells more
than 1.2 million Splendor bikes in H1
o
EBIDTA margin for the quarter at 13.86 per cent
Business highlights of Q2 FY’13
·
Global foray of brand “Hero” with
launches in Sri Lanka and Nepal
·
Brand migration to “Hero” on the
entire product range
·
Global alliance with “Engines
Engineering” to augment technology & design capabilities
Hero MotoCorp Ltd. (HMCL), the world’s largest
two-wheeler manufacturer, reported its
turnover (Net Sales & Other Operating Income) of Rs.5187.46 crore for the
second quarter (July-September) of the Financial Year (FY) 2012-13, even as it
kicks-off the festive season with over 2-lakh units in retail sales during the
auspicious Navratras in October.
HMCL’s profit after tax (PAT) for Q2’FY 13 stood at Rs
440.58 crore, while profit before tax (PBT) for the period stood at Rs 526.07
crores.
The Company has recorded an EBIDTA margin of 13.86 per cent.
The 2 wheeler Market is in a slow-down mode – because of
various reasons – like High Interest Rates, rising Fuel Costs and general economic slowdown. But, that has
not prevented the competitor, HONDA from improving its sales by 49% in the same
period.
Hero Motocorp has gone in for a production adjustment during the months of August and September and
reported volumes of 13,32,805 units in despatch sales in the second
quarter this fiscal (down 13.67 per cent
compared to 15,44,315 units during the corresponding period of the last
financial year ). For
the Year-to-Date (YTD – April-Sept 2012) period, Hero MotoCorp has sold close
to 3 million two-wheelers.
Hero's domestic two-wheeler
sales fell 2.9 percent in the first six months of the fiscal year that began in
April, against a 3.1 percent rise in overall industry sales, according to the
Society of Indian Automobile Manufacturers.
Hero MotoCorp completed the process of brand migration of
its models from the erstwhile joint brand to the new “Hero” brand during the
quarter. For the period April to September this year, Hero MotoCorp has
sold over 1.2 million Splendor bikes.
HMCL has recently started
despatching its new 110cc motorcycle – “Passion X Pro” - further broadening its range
of products to offer more exciting options for the customers in the forthcoming
festive season.
Mr. Pawan Munjal, MD & CEO, said “The two-wheeler
market in the country has been adversely impacted due to the overall market
slowdown and prevailing sentiments since the beginning of this quarter. Sensing
the slowdown in the market, we led the way in adjusting our production plans in
August and September, and this has been reflected in our quarterly sales
figures. The onset of the festive season has been encouraging, with the retail
sales of over two lakhs in the Navratras.
“We, at Hero MotoCorp will continue
to bring new launches even as we expand our distribution reach to over 5400
outlets during this fiscal. Our global business plan will also take shape this
fiscal, with the launch of Hero products in new international markets such as
Nigeria, Kenya and Guatemala, having already been launched in existing markets
such as Sri Lanka and Nepal in September,” he added.
The overwhelming customer response in the form of over
2-lakh units in retail sales during the Navratras has come about thanks to a
combination of strategic initiatives - the new exciting range of products, new
advertising campaigns comprising premium segment offerings and ground-level
activation.
The recent launches – the 110cc scooter Maestro and
125cc motorcycle Ignitor – have also received excellent
response from the customers. The company has also reintroduced its premium
segment 150-cc bikes “X-treme” and “Hunk” with
new features under the Hero brand name.
The new launch - “Passion X Pro” - comes powered with a new
generation 110cc engine that delivers a peak power output of 8.7 PS at 7500
rpm. The stylish yet sturdy bike comes with impressive features that include
APDV ignition system for superior drivability, Digital-Analog Combo Meter
Console with a ‘service due’ indicator for the rider’s convenience, stylized
fuel tank, striking trapezoidal multi-focal headlight and scintillating
graphics.
SLOW
DOWN :
When the top 2 two wheeler manufacturers claim a SLOW DOWN
in the market, there is of course a slow down. But, as we see, this slow down
is not affecting HONDA in any way. HONDA’s brand image was pushed up by HERO
itself, when the going was good. Honda
is reaping the fruits of that Brand Image now – after splitting with Hero.
Also, Honda spends a lot on R&D – of the right kind,
which does not seem to be there with the Indian Manufacturers. Incremental
improvements will not do – when you are facing from a HONDA. Huge, absolutely
fascinating improvements are the need of the day. In 4 wheelers, Nano was one
such, though, TATA hasn’t spent much on marketing his invention or in
beautifying it.
The other point is – Bajaj especially and Hero also to a
good extent, is neglecting the 2 wheeler needed for Indian Women and older men.
How can the top 2 two wheeler manufacturers of the Country NOT THINK at all on
a 2 wheeler needed for more than 50% of the Indian Population? And, yet hope to
succeed? Honda is especially targeting this market and is therefore not seeing
any slow down.
There is no slow down in this huge market – unless, you keep
your eyes closed.
A sage was asked by his disciple - why is it so dark? The
Sage said – Open your eyes.
Understanding the slow Down is as simple as that.
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