Published On: Tue, Jun 9th, 2020

Hero MotoCorp Q4 preview: Profit may slip up to 36% YoY

New Delhi, June 09, 2020.

Hero MotoCorp may report up to 36 per cent year-on-year (YoY) fall in net profit for the quarter ended March 31. The two-wheeler major is slated to announce its financial results on June 9.

Kotak Institutional Equities sees 36.40 per cent YoY drop in profit after tax on 23.10 per cent drop in net sales.

“We expect revenues to decline in Q4FY20 due to 25 per cent YoY fall in total volumes to 1.3 million units,” Kotak said in a report.

The company sold 13.34 lakh units during the quarter under review, down 25 per cent against 17.81 lakh units in the same period last year.

Shares of Hero MotoCorp closed 1.77 per cent up at Rs 2,382.70 on Monday, while the benchmark BSE Sensex settled 0.24 per cent higher at 34,370.

There are expectations that the automobile sector is likely to report sharply weak numbers in Q4, due to planned BS4 inventory correction undertaken by OEMs, lockdown in the month of March owing to spread of Covid-19 pandemic and sharp fall in export volumes.

Dolat Capital sees nearly 28 per cent each drop in bottomline and topline numbers of Hero Moto.

“Revenue to fall by 28 per cent YoY led by 26 per cent de-growth in volume and 3 per cent de-growth in realisation. We see operating margin to contract 255 basis points YoY to 11 per cent led by negative operating leverage and high discounts,” the brokerage firm said.

Motilal Oswal Financial Services sees 13.70 per cent and 24.50 per cent de-growth in net profit and net sales in March quarter.

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