Hero MotoCorp - Sales decline by 9.5% YoY to 499,113 - Motilal Oswal

Hero Moto's April-13 wholesale dispatches stood at 499,113 units, a decline of 9.5% YoY (+6.6% MoM). Considering the major festivals such in April this year (v/s March last year), Hero Moto has retailed over 550,000 units.

- However, high channel inventory (as on Mar-end) have restricted wholesale dispatches despite healthy retails. Retails will be strong in May as well due to marriage season demand in key states of UP, Bihar, MP & Rajasthan.

- On release of April sales, Mr. Anil Dua, Senior Vice-President (Marketing & Sales), Hero MotoCorp Ltd said, "we are glad to have opened the new financial year with despatch of close to five lakh two-wheelers in April. However, even this despatch number does not reflect the actual retail momentum during the month. Indeed, we have retailed over 550,000 units in April, which is an early indication of demand picking up for us across markets. Going forward for the overall industry growth, a lot will also depend on the monsoon and overall economic activity," he added.

- HMSI on the other hand has achieved its highest ever sales of 259,560 units in Apr-13, a growth of 31% YoY (+2.7% MoM). While motorcycle sales grew by 51.4% YoY (+2.1% MoM) to 123,240 units, scooter sales increased by 16% YoY (+3.2% MoM) to 117,404 units.

- Hero Moto trades at 14.3x/10.5x FY14E/FY15E EPS respectively. Maintain Buy.

Source : Equity Bulls

Keywords