Wednesday, October 24, 2012
HERO MOTOCORP - RESULTS FOR - Q2 FY 2013 - SEP 2012 - Sales Profits & Masgins Down - Festive season may help
RESULTS FOR Q2 FY 2013
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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