Analysts at Kotak Institutional Equities peg Hero's revenue growth at 38 per cent YoY to Rs 9,656.5 crore for the quarter under review, led by increase in volumes and 14 per cent YoY increase in average selling prices due to BS-VI transition and richer mix (higher mix of premium motorcycle and scooter segments). The bottom-line, meanwhile, is seen growing 11.1 per cent YoY to Rs 978.1 crore.
Nirmal Bang is also building an 11.8 per cent increase in the company's earnings to Rs 983.9 crore, while revenue is expected to grow 38 per cent YoY to Rs 9,677.7 crore.
The brokerage sees 80bps YoY contraction in Hero MotoCorp's margin for the quarter to 14 per cent, largely due to limited BS-VI pass-through and higher tax rate, which will be partially offset by price hike, tight cost control measures, and higher operating leverage. Earnings before interest, tax, depreciation, and ammortisation (Ebitda) may grow 30.4 per cent to Rs 1,354.9 crore.
Meanwhile, Nomura is building a 23 per cent YoY rise in the company's Ebitda to Rs 1,275 crore from Rs 1,038.9 crore in Q3FY20. "Margins, meanwhile, are likely to decline 53 bps QoQ to 13.2 per cent on rising commodity costs," the brokerage said.
Key things to watch
Market share trends in the premium segment – response to Xtreme 160cc, and inventory levels (as festive season is now behind) remain the key monitorables for investors, HDFC Institutional Equities said in a result preview note..
At the bourses, Hero MotoCorp's share underperformed the benchmark index, slipping 1.31 per cent in Q3FY21 as compared to Nifty's 24 per cent rally in the same period, ACE Equity data show.