The brokerage expects Hero MotoCorp's revenue to grow 25.7 per cent on YoY basis to Rs 9,518.1 crore from Rs 7,570.7 crore reported in the year-ago quarter, owing to increase in realisation. Realisation, meanwhile, is expected to increase due to BS-VI launches and price hikes. The bottom line is also likely to grow 10.7 per cent YoY to Rs 1,018.7 crore from Rs 919.8 crore reported in Q2FY20.
Emkay expects the company's gross margin to decrease due to partial pass-through of BS6 impact. Also, Ebitda margin is expected to contract 66 basis points (bps) YoY to 13.9 per cent due to fall in gross margin. Earnings before interest, tax, depreciation, and ammortisation (Ebitda) is seen rising 20 per cent YoY to Rs 1,321.4 crore.
According to the brokerage, with volume increase of around 7 per cent YoY and realisation increase of around 20 per cent YoY on account of recent product price hikes and BS6 pricing, Hero MotoCorp's revenue should increase 29 per cent YoY to Rs 9,752.6 crore. Net profit is also likely to rise 13.8 per cent YoY at Rs 1,053.6 crore.
Operating margins are expected to remain stable YoY at 14.5 per cent as higher raw material cost is likely to get offset by positive operating leverage. Ebitda is seen at Rs 1,412.2 crore as compared to Rs 1,101.1 crore in Q2FY20.
Analysts at HDFC Securities are building a 25 per cent YoY increase in Hero MotoCorp's Q2 revenues at Rs 9,440 crore, while net profit is seen flat at Rs 920 crore.
"Hero MotoCorp's two-wheeler volumes are up 7 per cent YoY in Q2. We expect Ebitda margin at 12.8 per cent, up 916 bps sequentially but down 174 bps on YoY basis," HDFC Securities said.
"Besides, market share trends in the premium segment post the launch of the Xtreme 160cc and festive season expectations and current inventory levels will be the key monitorables," it said.
The brokerage is building 24.2 per cent YoY growth in Hero MotoCorp's Q2 revenues at Rs 9,400 crore, led by strong volume growth. Ebitda margins are expected to remain flat on YoY basis, driven by cost saving and higher operating leverage. Net profit is seen increasing 10.7 per cent YoY to Rs 1,010 crore.
On the operational front, BP Wealth expects Hero MotoCorp's Ebitda to grow 22.7 per cent YoY to Rs 1,351.6 crore while Ebitda margin may remain almost flat at 14.4 per cent as compared to 14.5 per cent in the year-ago quarter.