Hero Motocorp Q4FY18 results loom, share price trade cautiously; know what analysts say

On Wednesday, Hero Motocorp share price became key stocks to watch on equity exchanges, as the company will be presenting their fourth quarter ended March 2017 results any time today. Looking at the trend of trading in the company, it can be said that investors are trading cautiously ahead of the result announcement. Let’s have a look what analysts expect in last quarter of FY18 for these two. 

At around 1133 hours, share price of Hero Motocorp surged by Rs 19.05 or 0.51% trading at Rs 3,752.75 per piece. 

Chirag Shah analysts at Edelweiss said, "We expect revenue growth of 25% YoY largely driven by volume growth of 23% YoY and higher realisations driven by price hikes taken to offset higher commodity costs." 

Shah added, "We expect operating margins to improve 50bps sequentially driven by higher operating leverage partially offset by higher commodity costs."

Analysts at Prabhudas Lilladher said, “Given the strong 23.5% YoY volume growth and expecting realisation improvement of 3% YoY, revenue is expected to grow ~27% YoY. Margins are expected to expand 300bps YoY.” 

Similar views were from Axis Capital. 

Phillip Capital said, “Sales are expected to grow by 23.9% YoY on account of higher rural demand.  EBIDTA and PAT are expected to grow by 25.3% and 22.2% YoY respectively.”

In IDFC Securities view, Hero Motocorp’s net revenues are expected to grow by 25% yoy led by a 23% yoy growth in volumes while realizations are expected to rise marginally by 1% on nominal price hikes .

It added, “ EBITDA margins at 16% are likely to remain flat sequentially to Rs 13.9b as increase in RM costs are likely to negate lower employee and other expenses. PAT is likely to be Rs 9.7b ( increase of 35% yoy; +20% qoq).”

Two-wheeler manufacturer Hero MotoCorp witnessed over 4% year-on-year (YoY) rise in it's profit after tax (PAT) during the third quarter ending December 2017 (Q3FY18) period. 

The company's PAT was at Rs 805.43 crore during the December quarter of FY18 compared to Rs 772.05 crore in the corresponding period of the previous year.