Hero Motocorp share price plummets 2% after its lowest profit in at least the last six quarters
Hero Motocorpreported a 15% drop in its profit to ₹620.71 crore between January and March 2020.
- The company’s revenue from operations was down almost 21% Year-on-Year to ₹6,238.39 crore during the period.
- The EBITDA margin for the quarter stood at 10.6%.
AdvertisementHero Motocorp, the largest two-wheeler manufacturer, shares declined over 2% on Wednesday after the company reported a 15% drop in its profit to ₹620.71 crore between January and March 2020 compared to the same quarter last year.
However, Kotak Institutional Equities had expected its fourth-quarter profits to fall by about 36%.
The company’s revenue from operations was down almost 21% Year-on-Year to ₹6,238.39 crore during the period, the company said. The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin for the quarter stood at 10.6%— which is a sharp fall compared to 13.6% the same time last year.
The board also recommended a final dividend of ₹25 equity share for the financial year 2019-20.
“While the COVID-19 pandemic has pushed several timelines, we have successfully navigated through the unprecedented times with business continuity. As we now rapidly scale-up operations post the lockdown, it will be critical that the industry receives support from all quarters,” said Pawan Munjal chairman & CEO, Hero MotoCorp
The company shares took a massive hit when the government announced lockdown to contain the spread of coronavirus in March. However, the shares are nearly back to the pre-COVID levels— up almost 52% since March 31. The stellar rally in Hero’s shares could also be because of the news that said the firm had sold nearly 10,000 motorcycles within a week after reopening.
On March 22, the government announced a nationwide lockdown to deal with the COVID-19 pandemic and Hero MotoCorp to halt operations until May 4. Hero MotoCorp became the first two-wheeler manufacturer in the country to resume operations as it reopened three plants — Dharuhera and Gurgaon in Haryana and Haridwar in Uttarakhand, the company said in a statement.
The company has about 42% total market share in the Indian two-wheeler category, according to Business Standard.
It also launched an online sales platform, yesterday (June 8) — eSHOP. The customers can choose the model, colour and accessories online, and the car will be delivered at home. “The Sales Assistant handles all the customers’ queries and guides them through the remaining steps like documentation, finance, invoicing, insurance, registration and delivery (optional Home delivery),” said the company’s statement.
SEE ALSO: Hero MotoCorp shareholders are betting that people will go for cheaper bikes after the pandemic
Maruti Suzuki, Hyundai and others see sales plunge by 80% in May with exports taking a massive hit during the lockdown
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