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Hero MotoCorp: Hero Moto’s Q2 net profit slips 10%, but expects a post-Covid bounce

New Delhi: India’s largest two-wheeler maker Hero MotoCorp Thursday missed street estimates while reporting a 10% decline in standalone net profit at ₹716.07 crore for the second quarter, reflecting the bottom-line impact of sluggish rural sales.

The company had posted net profit of ₹794.40 crore in the corresponding period of the last financial year. An ET Now poll had estimated the company would report a net profit of ₹746.2 crore for the second quarter of the ongoing financial year.

Revenues from operations in the quarter under review increased 7.4% to ₹9,075.35 crore, from ₹8,453.40 crore in the year-ago period. The top line was higher than estimated at ₹8,812 crore.

Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at ₹1,038 crore in the period under consideration.

Niranjan Gupta, chief financial officer (CFO), Hero MotoCorp, said strong domestic consumption since the re-opening of all the sectors after Covid augurs well for the industry going ahead.

“A healthy festive period demand across most categories, specifically in the auto sector, has demonstrated that the underlying propensity to spend has gone up. Consumer confidence is coming back, which augurs well for growth momentum moving forward,” Gupta said.

Hero MotoCorp sold 1.428 million units last quarter, marginally lower compared with 1.438 million two-wheelers sold in Q2FY22.

Gupta said the company’s earnings reflect continued financial discipline, focus on cost savings and capital allocation on one hand, while ensuring premiumisation of portfolio on the other.

, he said, will continue to build presence in the premium segment through multiple launches over the next few quarters.

Gupta, however, cautioned global uncertainties may make the business environment challenging in the coming months.

“The global macro headwinds may keep the playfield a bit uncertain, and navigating the same over next few quarters will be important. However, as the commodities cool off and the rate cycle reaches its peak, the medium term outlook for the Indian auto industry appears quite encouraging,” added Gupta.

Shares of Hero MotoCorp closed at ₹2,646.15 apiece, up 0.15% on the Bombay Stock Exchange (BSE).

The results were announced after market hours.

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