Hero MotoCorp gears up for robust growth led by rich product mix

H ero MotoCorp Ltd's results for the March quarter (Q4FY24) has a few bright spots. For one, aricher product mix contributed to a 4.6% year-on-year growth in its average realization, at ₹68,373. Sales volumes surged 9.6%, driven by a 10.3% increase in motorcycles, which made up 93% of total volumes, with the rest coming from scooters. Consequently, overall revenue growth stood at 14.6% in Q4, totalling 9,519 crore.

- Manvi Agarwal

 

Besides, lower raw material costs facilitated an earnings before interest, taxes, depreciation, and amortization (Ebitda) margin expansion of around 130 basis points to 14.3%, despite the impact of electric vehicle (EV)-related spending. Effectively, it means absolute Ebitda growth, at 25.5%, is faster than revenue growth.

For Hero Moto, FY25 has begun on a strong note, setting stage for doubledigit revenue growth. In April, volume growth stood at almost 35%, bolstered by wedding season demand.

Factors expected to aid growth this year include strong domestic demand from urban and rural areas, as well as product launches and enhancements to its distribution network. The management is optimistic about a gradual recovery in rural mar-

kets, particularly in view of the normal monsoon forecast for FY25.