HERO MOTOCORP LTD - SECOND QUARTER RESULTS - Q2 FY 15 - SEPTEMBER 2014 - NET SALES UP 20.49%; NET PROFITS UP 59% YoY

HERO MOTOCORP LTD

BRIJMOHAN LALL MUNJAL, CHAIRMAN

PAWAN MUNJAL MD & CEO

SECOND QUARTER RESULTS Q2 FY 15

SEPTEMBER 2014

Hero Motocorp has declared excellent results for the second quarter ending September 2014. The results are in the table Below :

Sales Numbers have gone up 19.51% YoY. 

Net Sales in Rupee terms has gone up 20.49% YoY. Since expenses have risen less than proportionately by 16.89% only YoY, the operational profit has zoomed up by 57.54 % YoY.  

Net Profits have gone up by 58.57% YoY.

RESULTS TABLE :

HERO MOTO	Q2 FY15	Q1 FY15	QoQ Dif%	Q2 FY14	YoY Dif%
NO. SOLD	1692523	1715254	-1.33	1416276	19.51
NET SALES	686350	699940	-1.94	569646	20.49
TOTAL INCOME	691534	703684	-1.73	572621	20.77
TOTAL EXP	605548	638116	-5.1	518042	16.89
OPT	85986	65568	31.14	54579	57.54
PBT	104843	76545	36.97	65829	59.27
NPT	76337	56276	35.65	48141	58.57
EPS(FV.Rs.2)	38.23	28.18	35.66	24.11	58.56

QUARTER-WISE PERFORMANCE in 2013-14

(from Annual Report)

Q1 (APRIL 2013 – June 2013)

Entered Africa and Central America with the launch of Brand Hero in these markets

First-ever equity investment in an overseas firm; to buy 49.2% equity at Erik Buell Racing (EBR) for US$ 25 Million

Launched India’s first-ever warranty of five years on all its two-wheelers (5 years or 70,000 km on motorcycles)

Launched the retail finance arm, Hero FinCorp, with a phase-wise expansion plan

Q2 (July 2013 – September 2013)

Became the first Indian two-wheeler company to reach the historic milestone of 50 million units production

Introduced an innovative campaign titled ‘Hero Mileage’, capturing Hero’s best-in-class fuel-efficiency across its product range; and the tagline – ‘Thoda Extra Kilometre Per Litre’ - has gone on to become part of the youth lingo 

Initiated project ‘Leap 20’ to bring very high levels of innovation across our supply chain, and partnering with our suppliers to drive 

significant improvements in our cost structure, even as we raise the bar even higher on product quality and reliability

Q3 (October 2013-Dec 2013)

Appointed Head of Strategy & Performance Transformation and Head of the newly-created division of Engine Design & Development

Commenced construction of our ‘Hero Centre of Global Innovation and Research & Design (R&D)’ at Kukas, near Jaipur in Rajasthan,  investing Rs.450 crores

Forms new joint venture in partnership with Magneti Marelli to develop next-gen two-wheeler fuelling systems

Unveils 15 new offerings, with new-gen features including the all-new Splendor iSmart, Karizma R, ZMR, Xtreme and Pleasure

Registered 6.25 lakh sales in October 2013, first-ever manufacturer to cross the landmark 6 lakh unit sales in a month

Launched Splendor iSmart with ‘i3S Technology, Pleasure with Integrated Braking System, Xtreme with ‘Electronic Immobiliser’ and Karizma & Karizma ZMR

Series of refreshes and variants of existing platforms, include HF Dawn & HF Deluxe, Splendor Pro, Super Splendor, Passion Pro, HF Deluxe Eco, Glamour and Glamour F

Q4 (January  2014 – March  2014)

Showcased an exciting range of products for the future at 2014 Auto Expo

Entered Bangladesh and Turkey with an array of popular Hero motorcycles and scooter

EXCERPTS FROM AR 2014

Fresh capacities have been planned accordingly. As I write this, our fourth facility at Neemrana is ready to start production, and our global parts centre will be functional before the end of the calendar year. We have also started the land development work at our Halol plant in Gujarat.

In fact, I am convinced that our most challenging phase is now behind us. Hero has moved beyond the legacy of its past, and is progressing steadily towards its destiny of becoming a global and independent bike and scooter powerhouse.

Our footprint now spans South Asia, Africa, Central and Latin America, with a presence in Europe via Turkey. To serve customers in select markets faster, Hero MotoCorp has also sewn up joint ventures in critical markets and has kick-started overseas assembly operations. The first such operation has come up in Kenya.

Separate equity ventures with local firms in Bangladesh and Columbia are also in place. We will build on these exciting forays. Hero began developing an R&D ecosystem from ground up eighteen months ago. This has flowered remarkably.


OTHER LATEST NEWS : 


Hero MotoCorp wants to invest Rs 5,000 crore over 2-3 years in capacity building. 

"We are aiming to be in the European markets towards the end of 2015. Leap will make its debut first in Europe," Vice Chairman and MD Pawan Munjal said. "For the US market, our products are currently undergoing homologation."
 
Hero Motocorp has also unveiled its 4th manufacturing facility and global parts centre at Neemrana in Rajasthan. Mr.Munjal said the Rs 5,000 crore investment plan covers its "factory at Neemrana, the new plants coming up at Halol in Gujarat and in Colombia and Bangladesh, the Hero Global Centre for Innovation and R&D at Kukas in Rajasthan and the proposed plant in Andhra Pradesh".

2 new scooters will be launched in the next eight to 12 months with its own Technology. The company so far depended on erstwhile joint-venture partner Honda Motor for technology.
 

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

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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