Net profit of Hero MotoCorp is likely to rise 15.6 percent at Rs 867 crore in April-June from Rs 750.3 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, the auto major's revenue may jump 10 percent at Rs 7661 crore against Rs 6955.2 crore in year-ago period. During the period, its operating profit margin is seen rising 15.8 percent against 15 percent while EBITDA may be up 15.9 percent at Rs 1215 crore versus Rs 1048 crore year-on-year. Margins are expected to improve on annual basis due to price hike of 1 percent in May. However, sequential spike in raw material costs especially steel ( 17 percent ) and rubber ( 32 percent) could keep margin upside capped in the near term, say analysts polled by CNBC-TV18. Realisations may improve 3.6 percent (YoY) to Rs 43800 per unit
led by price hikes. Favourable product mix is expected led by lower share of scooters. Seasonally there is lower ad spends in Q1. Earlier, Hero MotoCorp management said that the company aims to maintain margins at 14-15 percent in FY17. What to watch out for: #Single digit Volume growth of 6 percent this quarter #Total volumes up 6 percent YoY at 17.45 lakh versus 16.45 lakh units #Demand was subdued in May, volumes lacklustre except for scooters #Demand dipped after heavy retail offtake in marriage season in April #New launches in scooter segment Maestro Edge and Duet did well
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