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Hero MotoCorp Q2 net profit seen up 4% to Rs 460 crore

NEW DELHI: Hero MotoCorpBSE -1.06 % is scheduled to declare its results for the quarter ended September 30 on Wednesday.

The two-wheeler major is expected to report a net profit of Rs 460 crore, up 4.5 per cent YoY, for the second quarter of the fiscal year 2014, as compared to Rs 440.60 crore reported in the year-ago period, according to analysts polled by ET Now.

According to analysts, higher tax outgo in Q2 is likely to dampen profits, while volume growth of 6 per cent YoY is likely to boost sales.

Revenues are expected to edge higher by 8.6 per cent YoY for the quarter ended September 30 to Rs 5,635 crore as compared to Rs 5,188 crore reported in the year-ago period.

EBITDA is seen at Rs 800 crore, or a 10 per cent jump in the second quarter of fiscal year 2014, compared to Rs 719 crore in the year ago period. EBITDA margins are also likely to grow to 14.2 per cent from Rs 13.9 per cent in the year ago period, supported by better utilization and price hike.

However, analysts' polled by ET Now expects weak Japanese yen in Q2 may lead to higher royalty payments QoQ.

The two-wheeler maker has been instrumental in releasing new products to beat competition and foray into new geographies to boost sales.

Earlier in the month of October, 
Hero MotoCorp unveiled 15 new products that will hit the market during the six months of the current fiscal year.

The company also said that it will enter new markets of Turkey and Egypt in the next few months, while it is also working on a low cost bike for the entry level segment. The new products showcased include refreshed top-end bike Karizma R, ZMR, Splendor I-Smart and new variant of scooter Pleasure.

According to 
Thomson Reuters StarMine data, Hero MotoCorp may miss the consensus operating profit forecast for the July-September quarter when it reports results.

StarMine's SmartEstimates, which places greater emphasis on forecasts by top-rated analysts, expects Hero MotoCorp to report an operating profit of Rs 720 crore for the quarter, compared with a consensus mean estimate of Rs 760 crore.

Watch management 
commentary for:

> Plans to regain 
market share loss (400 bps decline MoM)

> New Launch pipeline, export market strategy, channel inventory updates