Hero MotoCorp Ltd

About

Hero Moto Corp earlier also known as “Hero Honda” is one of India’s first motorcycle manufacturers.
The company started in 1984 as a Technological collaboration with Honda, Japan. Before this collaboration, Hero was selling Cycles under the brand name, Hero Cycles.
In 2011, Honda group sold its 26% stake in the company to the Munjals (promoters) and ended the JV. Post the termination of JV, the name of the company was changed to Hero Motocorp. [1] [2]

Key Points

Established Brands and market share
It is the world’s largest manufacturer of 2 Wheelers, in terms of unit volumes sold by a single company in a calendar year, for 19 years in a row [1]
In FY 20, it sold 64 lakh two-wheeler units. Sales grew at a CAGR of 39% over the past decade.[2]
The overall market share of the company in the two-wheeler segment stands at 35.7% as of FY20[3]
The company has some strong brands under its names like Splendor, Passion, Glamour in the bike segment and like Pleasure, Maestro in the scooter segment and others, etc [3]

Read More
  • Market Cap 49,027 Cr.
  • Current Price 2,449
  • High / Low 3,629 / 2,424
  • Stock P/E 16.9
  • Book Value 787
  • Dividend Yield 3.67 %
  • ROCE 24.2 %
  • ROE 18.7 %
  • Face Value 2.00

Pros

  • Company is almost debt free.
  • Stock is providing a good dividend yield of 3.67%.
  • Company is expected to give good quarter
  • Company has a good return on equity (ROE) track record: 3 Years ROE 22.25%
  • Company has been maintaining a healthy dividend payout of 57.26%

Cons

  • The company has delivered a poor sales growth of 1.70% over past five years.
Loading peers table ...

Quarterly Results

Consolidated Figures in Rs. Crores / View Standalone

Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021
7,937 7,953 8,186 7,660 7,075 6,334 2,969 9,473 9,827 8,690 5,503 8,539
6,828 6,842 7,013 6,516 6,017 5,660 2,852 8,165 8,478 7,463 5,119 7,516
Operating Profit 1,109 1,111 1,173 1,144 1,058 673 117 1,308 1,349 1,227 384 1,023
OPM % 14% 14% 14% 15% 15% 11% 4% 14% 14% 14% 7% 12%
Other Income 208 193 970 118 210 157 152 147 206 106 145 158
Interest 9 11 11 14 12 10 12 11 11 13 13 14
Depreciation 158 155 242 210 211 183 179 183 180 174 173 174
Profit before tax 1,150 1,137 1,890 1,039 1,044 638 78 1,261 1,364 1,147 343 993
Tax % 33% 31% 34% 15% 13% 4% 26% 24% 25% 23% 25% 25%
Net Profit 775 771 1,252 879 902 605 59 958 1,019 881 256 746
EPS in Rs 38.82 38.62 62.70 44.03 45.15 30.27 2.96 47.98 51.02 44.10 12.82 37.32

Profit & Loss

Consolidated Figures in Rs. Crores / View Standalone

Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 TTM
25,275 27,538 28,457 28,610 32,458 33,971 29,254 30,959 32,558
21,722 24,018 24,033 24,025 27,124 28,946 25,184 26,902 28,576
Operating Profit 3,553 3,520 4,424 4,585 5,334 5,025 4,070 4,058 3,983
OPM % 14% 13% 16% 16% 16% 15% 14% 13% 12%
Other Income 430 325 421 830 564 741 1,434 553 615
Interest 12 12 15 27 31 37 47 46 51
Depreciation 1,107 540 443 502 575 624 846 715 700
Profit before tax 2,864 3,292 4,387 4,885 5,292 5,104 4,611 3,849 3,847
Tax % 26% 29% 29% 27% 30% 32% 21% 24%
Net Profit 2,103 2,365 3,142 3,584 3,720 3,444 3,638 2,918 2,902
EPS in Rs 105.30 118.42 157.34 179.49 186.29 172.44 182.14 146.05 145.26
Dividend Payout % 62% 51% 46% 47% 51% 50% 49% 72%
Compounded Sales Growth
10 Years: %
5 Years: 2%
3 Years: -2%
TTM: 26%
Compounded Profit Growth
10 Years: %
5 Years: -2%
3 Years: -8%
TTM: 15%
Stock Price CAGR
10 Years: 2%
5 Years: -5%
3 Years: -7%
1 Year: -21%
Return on Equity
10 Years: %
5 Years: 26%
3 Years: 22%
Last Year: 19%

Balance Sheet

Consolidated Figures in Rs. Crores / View Standalone

Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Sep 2021
40 40 40 40 40 40 40 40 40
Reserves 5,583 6,500 8,794 10,276 11,932 13,080 14,366 15,376 15,678
Borrowings 284 100 232 261 228 312 453 584 617
4,215 4,014 3,829 4,736 5,197 5,072 4,815 7,096 7,092
Total Liabilities 10,122 10,654 12,896 15,312 17,397 18,504 19,674 23,096 23,426
2,247 2,952 3,784 4,599 4,961 4,952 6,473 6,380 6,505
CWIP 855 719 653 581 355 573 391 495 225
Investments 4,106 3,118 4,501 6,066 7,669 6,114 8,359 10,582 9,598
2,914 3,864 3,958 4,066 4,411 6,865 4,451 5,639 7,098
Total Assets 10,122 10,654 12,896 15,312 17,397 18,504 19,674 23,096 23,426

Cash Flows

Consolidated Figures in Rs. Crores / View Standalone

Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
2,963 2,186 3,722 4,007 4,017 1,032 5,518 4,110
-1,616 31 -2,300 -1,972 -1,858 1,298 -2,819 -2,289
-1,414 -2,131 -1,475 -2,036 -2,102 -2,252 -2,602 -1,852
Net Cash Flow -66 86 -53 -1 57 78 97 -31

Ratios

Consolidated Figures in Rs. Crores / View Standalone

Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
Debtor Days 13 18 16 20 16 29 19 27
Inventory Days 13 16 14 14 16 19 24 30
Days Payable 46 50 51 62 56 54 58 88
Cash Conversion Cycle -19 -16 -20 -29 -24 -5 -15 -32
Working Capital Days -29 -14 -11 -16 -14 8 -7 -17
ROCE % 50% 54% 49% 45% 39% 27% 24%

Shareholding Pattern

Numbers in percentages

Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021
34.63 34.63 34.63 34.63 34.63 34.63 34.77 34.76 34.76 34.76 34.76 34.76
39.95 38.19 35.20 36.48 35.29 34.27 32.71 33.29 35.89 37.19 34.97 32.28
15.37 16.08 18.60 19.16 19.56 19.89 21.72 22.85 19.98 18.68 20.23 21.97
10.04 11.10 11.57 9.73 10.52 11.21 10.80 9.10 9.37 9.37 10.05 11.00

Documents