India’s largest two-wheeler maker Hero MotoCorp Ltd today posted a 14.2% growth in its net profit for the second quarter on a year-on-year basis. The robust profit growth reflects improvement in volume and a higher share of the 125cc segment and above models, which aided margin expansion.
The automaker’s standalone net profit for the September quarter came in at Rs 1,203.54 crore, against Rs 1,053.81 crore in the year-ago period. The company’s revenue from operations rose 10.8% on year to Rs 10,463.21 crore.
Revenue growth was driven by improvement in the two-wheeler volume and as well favorable mix of products. The company dispatched a total of 15.20 lakh two-wheelers during the quarter, up 7% on year. Domestic two-wheeler sales have been strong, driven by a robust uptick in rural markets.
During the quarter, the automaker launched the Hero Glamour 2024 with new features and color options, the limited edition Mavrick 440 Thunderwheels, the new Hero Xtreme 160R 2V 2024 Edition and the new Hero Destini 125 scooter.
The company surpassed 6,000 monthly units in electric two-wheeler sales during August for the first time with retail market share growing to over 5%. Hero MotoCorp also entered Southeast Asian market by starting operations in the Philippines during the quarter.
“We have continued our exceptional performance in Q2 FY’25, once again creating a new high in both topline and bottom line,” Chief Executive Officer Niranjan Gupta said.
Hero MotoCorp’s EBITDA margin, or operating profit, rose 14% on year in July-September to Rs 1,515.89 while the EBITDA margin expanded to 14.5% from 14.1% in the year-ago period. The expansion in margin can be attributed to softening of raw material costs and a favorable mix of higher-margin products in the sales.
The company’s cost of raw materials consumed as a percentage of revenue from operations came down to 66% from 68.6% in the year-ago period. Total expenses during the period grew 10.3% on year to Rs 9,145.94 crore.