Hero MotoCorp Q1 Results: Profit Falls 95% As Pandemic Dents Sales
Net profit of India’s largest two-wheeler maker fell 95% year-on-year to Rs 61 crore.
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Hero MotoCorp Ltd. saw its quarterly profit get nearly wiped out amid the economic disruptions caused by the Covid-19 outbreak.
Net profit of India’s largest two-wheeler maker fell 95% year-on-year to Rs 61 crore in the three months ended June, according to an exchange filing. That compares with the Rs 82.2-crore consensus estimate of analysts tracked by Bloomberg.
- Revenue fell 63% to Rs 2,971 crore, compared with the Rs 2,756-crore forecast.
- Earnings before interest, tax, depreciation and amortisation fell 91% to Rs 108 crore.
- Ebitda margin contracted to 3.6% from 14.4%
India’s automobile sector was grappling with the worst slowdown in more than two decades when the coronavirus-induced lockdown stalled operations. The virus outbreak forced companies to halt production and dealers to shut showrooms. After a washout in April, sales revived marginally in May and June after India eased the lockdown curbs.
“The Covid-19 period has been an unprecedented challenge for the automotive industry, as indeed for several other sectors and economies around the world,” Chief Financial Officer Niranjan Gupta was quoted as saying in a media statement.
Hero MotoCorp’s sales fell nearly 70% year-on-year during the reported quarter. But the two-wheeler maker sold more than 5 lakh units in June alone—a level seen one year ago.
“We are already seeing green shoots, and expect them to sustains and get stronger as we move towards the festive season,” Gupta said. “Our July month sales were more than 95% of the pre-Covid sales and we do see a positive trend moving forward.”
Shares of Hero Motocorp rose 1.3% ahead of the results, compared with a flat Nifty 50 Index.