The third quarter of FY2021 looks to have been a good one for many automotive industry players. The latest to report robust numbers in October-December is Hero MotoCorp.
The world's largest two-wheeler manufacturer has reported its highest-ever revenue for quarter. The company's revenue from operations for Q3 FY2021 stood at Rs 9,776 crore, up 39.7% year on year (Q3 FY2020: Rs 6,997 crore).
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter were Rs 1,414 crore (Q3 FY2020: Rs 1,039 crore) reflecting 14.5% EBITDA margin and a growth of 36.1% year on year.
While Profit Before Tax (PBT) at Rs 1,442 crore was up 42.5% (Q3 FY2020: Rs 1,012 crore), Profit After Tax (PAT) at Rs 1,084 crore clocked YoY growth of 23.2% (Q3 FY2020: Rs 880 crore).
Hero MotoCorp sold a total of 18.45 lakh units in Q3 FY2021, a YoY growth of 19.7% over Q3 FY2020. The company attributes this performance to “robust sales volume during the quarter and a combination of key strategic initiatives such as cost reduction efforts to partially offset the impact of the commodity costs and intense operational efficiencies.”
On January 21, 2021, Hero MotoCorp surpassed the milestone of 100 million (10 crore) units in cumulative production, achieved in 37 years.
Commenting on the Q3 results, Niranjan Gupta, Chief Financial Officer, Hero MotoCorp, said: “Our performance in the third quarter underlines Hero MotoCorp’s operational strength and ability to perform well despite a challenging and volatile environment. The company has been able to drive profitable growth through improvement in market shares, acceleration of Leap-II savings initiatives, continued control on overheads, and cash flow management. We continue to build on our strong portfolio with the launch of special edition variants to commemorate the milestone of 100 Million units in cumulative production.”
“Going forward, we expect input costs to remain under pressure due to the rising prices of commodities and fuel. The price increase on our range of products that we undertook from January 1 will partially offset these cost pressures. We will continue to focus on driving cost savings, and take judicious price increases if and when necessary.”
With the International Monetary Fund (IMF) projecting a strong recovery in India’s economic growth rate in FY2022, we remain optimistic about the prospects of personal mobility and consumer demand. Hero MotoCorp is confident to make the most of this economic spur on the back of new launches of exciting products and our strong brand equity with customers across markets.
“The government has also provided a balanced and a well-calibrated Budget that focuses on reviving growth through infrastructure spends, while generating resources through public sector asset monetisation.. The emphasis on health, and outlining a five-year path for fiscal deficit, shows the government’s focus on long-term fiscal prudence. We also welcome the step to abolish the anti-dumping duty on steel, and rationalisation of duties on some other products to address the cost spiral and impact on consumers.”