Hero MotoCorp Q1 Review - All Eyes On Festive Season: Systematix

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Systematix Research Report

Hero MotoCorp Ltd.'s Q1 FY22 Ebitda margin of 9.4% was below consensus and our estimates as gross margin contraction hurt profitability.

Strict cost controls have partially offset the impact of sharp raw material inflation.

The management indicated that domestic demand was impacted due to local lockdowns, but is showing signs of improvement ahead of the festive season.

Normal monsoon and healthy reservoir levels should also drive rural demand in the festive season.

Hero MotoCorp has lost the market share it gained last year (~300 basis points) owing to weak demand, particularly in the executive segment.

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