India’s top motorcycle maker, Hero MotoCorp, beat analysts’ estimates for second-quarter profit on Thursday, driven by higher sales of its mid-range motorcycles.
The company’s standalone profit rose 14% over the year earlier to 12.04 billion rupees ($142.6 million) for the three months ended Sept. 30. Analysts were expecting 11.54 billion rupees, according to data compiled by LSEG.
The standalone results do not include the business of its subsidiaries or associates, including IPO-bound Ather Energy and Hero FinCorp.
Sales volumes of Hero grew 7%, led by a 16% rise in sales of its more expensive mid-range motorcycles such as “Xtreme 125R”. That took their contribution to the company’s overall sales volumes to 12.6% from 11.6% a year earlier.
The entry-level motorcycles such as “Splendor” formed three-fourths of the total volumes.
Higher sales, along with launches of its premium models such as the “Karizma XMR” in the past few quarters, boosted Hero’s revenue by 11% to 104.63 billion rupees, edging past analysts’ estimate of 102.18 billion rupees.
CEO Niranjan Gupta said the company plans to launch three more premium motorcycle models — Xpulse 210, Xtreme 250R and Karizma XMR 250 — in the next six months and three new scooters by March 2025.
Hero MotoCorp also clocked its highest-ever retail sales in the October-November festive period, “backed by higher demand from the rural sector”, Gupta said.
The rural market accounts for a little over half of India’s total two-wheeler sales.
Hero’s earnings before interest, taxes, depreciation and amortisation margin grew to 14.5% during the quarter from 14.1% a year earlier.
Shares of Hero closed 1.9% higher ahead of reporting its results.
($1 = 84.4280 Indian rupees)
