Hero MotoCorp has reported its highest-ever quarterly sales volumes at 17,45,389 units and a gross turnover of Rs 8,010.66 crore for Q1 FY2017.
09 Aug 2016 | 7014 Views | By Amit Panday
Hero MotoCorp, the largest two-wheeler manufacturer in India, has reported its highest-ever quarterly sales volumes at 17,45,389 units, which resulted in a gross turnover of Rs 8,010.66 crore for Q1 FY2017.
Reportedly, the company sold 99,562 units more than its Q1 FY2016 sales of 16,45,867 units, which marked a growth of 6.05 percent YoY for the period. Its gross turnover for the corresponding quarter of previous fiscal stood at Rs 7,435.47 crore.
The growth in quarterly turnover was also met by a corresponding rise in expenses in Q1 FY2017. The cost of materials consumed for the quarter ended June 30, 2016, stood at Rs 5,033.66 crore as against Rs 4,869.43 crore reported in Q1 FY2016, a jump of 3.37 percent YoY.
However, on the profit after tax (PAT) front, Hero MotoCorp, at Rs 883.10 crore, recorded its highest ever for any quarter in Q1 FY2017. The company’s Q1 FY2016 PAT stood at Rs 747.54 crore.
According to an official note from the company, the Q1 FY2017 EBITDA margin also improved to its highest ever at 16.63 percent as against 15.09 percent in Q1 FY2016.
The rise in the company’s EBITDA margins can be attributed to the growth in the sale of its 125cc motorcycle models such as Glamour and Super Splendor, and the new Duet and Maestro Edge scooters.
“Providing additional momentum to the growth trajectory has been the 125cc segment where the company now commands a well over 50 percent market share, thanks to the large volume contributions from Glamour and Super Splendor. In Q1 FY2017, the Glamour grew by 32 percent and the Super Splendor grew by 29 percent over the corresponding quarter of the previous fiscal,” quotes the official release from Hero MotoCorp.
Growing market share
According to industry sales data, Hero MotoCorp’s market share in the 110cc-125cc motorcycle segment rose from 39.41 percent in Q1 FY2016 to 41.20 percent in Q1 this fiscal. The company’s sales volume in this segment grew from 173,731 units in Q1 FY2016 to 225,015 units in Q1 FY2017, marking a healthy jump of 29.52 percent YoY, all thanks to the soaring sales of its Glamour model.
Similarly, in the overall scooter segment, Hero MotoCorp’s market share has recorded a commendable YoY jump in Q1 FY2017. The company sold 210,876 scooters in Q1 FY2017 as against 148,908 scooters in Q1 FY2016, thereby growing by an impressive 41.61 percent YoY. This has helped the company grab additional market share, which is now 15.37 percent in Q1 FY2017 compared to 13.79 percent in Q1 FY2016.
Splendor iSmart 110 to drive gains
What will further work in Hero MotoCorp’s favour in the coming months is its all-new motorcycle, which was grounds-up developed at its Jaipur-based R&D facility by its in-house engineers. The model, which marks the company’s serious entry into the growing 110cc motorcycle market, is also the latest offering under its popular Splendor brand and comes with its pocket-friendly i3S technology.
While the company has reported that the Splendor iSmart 110’s initial response has been positive, the model is expected to take on the current market leaders, the Honda Livo and the Dream series.
Commenting on his company’s highest quarterly sales for Q1 FY2017, Pawan Munjal, chairman, MD and CEO, Hero MotoCorp, said; “The first quarter of this fiscal carried forward the growth trajectory that we set for ourselves in the previous quarter. The sales growth is reflected in the positive financial results for the quarter and has given us the momentum to carry forward as we prepare for the upcoming festive season. With the above-average monsoon so far and the implementation of the 7th Pay Commission recommendations, we remain cautiously optimistic about the remaining months of FY2017.”
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