Hero MotoCorp expects two-wheeler industry to see double-digit growth in FY2023

With economic activity picking up and high grain prices enhancing rural incomes, Hero MotoCorp, the country's largest two-wheeler manufacturer, expects the two-wheeler industry to bounce back in the current fiscal, as per PTI reported.

With good macroeconomic indications, the company anticipates double-digit growth in the current financial year.

"The macro indicators are really looking good, the GST collection we have all seen is all-time high in April, the e-way bills have picked up, I would say all sectors of the economy have opened up," Hero MotoCorp CFO Niranjan Gupta said in an analyst call.

According to PTI, grain prices are high, they are augmenting rural income, the monsoon forecast is decent, and so on and so forth, and it is clearly evident also that while Covid may not have gone away, everyone has learned now to get on with their livelihoods and hence the consumer confidence and spending are bouncing back easily and actually solidly, he added.

"Already, we are seeing signs in April and we have no reason to believe why the two-wheeler industry cannot grow double-digit in FY2023," Gupta stated.
Commenting specifically on the growth prospects of the company, he noted: "We will have multiple products and variant launches in the fiscal and added with all the actions already taken, we are confident of gaining market share and hence growing ahead of the industry."

Hero MotoCorp recorded a consolidated profit of Rs 2,329 crore in fiscal 2021-22, down 21% from Rs 2,936 crore in fiscal 2020-21. Revenue from operations fell to Rs 29,551 crore in FY21 from Rs 30,959 crore the previous year, said PTI.

According to Gupta, the entire two-wheeler industry would like to go back to the FY2019 peak as soon as possible.

"We got to look at fundamental underlying factors which play to the long-term growth of two-wheeler industry, all those factors are intact and I will repeat those, whether it is under penetration, the need for mobility, whether it is a pent up that has happened in the last 3-4 years, the big pool that is developing, which should actually now propel the replacement demands to be much bigger," he stated.

Better financing choices, he continued, might also help with future sales growth, PTI said.

"So I think the fundamental growth levers remain intact. How fast it happens, we will have to see," Gupta said.

Listing out challenges, he noted: "One of the things that is an area of concern for industries across the board is the cost inflation, which is triggered now by the geopolitical situation as we all know. Of course, this will be a watch out, but we are no stranger to commodity inflation, we have been seeing cycles in the past as well as recently."

He said that the company will continue to navigate this space by combining smart price hikes with cost savings and, of course, broad-based portfolio development, including premiumization of some models, PTI said.

In terms of the company's electric product rollout, Gupta stated that the first model will be unveiled on July 1, 2022, PTI said.

"We want to ensure that through rigorous testing the product we put in the market is of the right quality and safety parameters as we have always done earlier. For us, customer comes first and business will follow," he added.