Hero Motocorp’s ride may be easy
Subscribe to enjoy similar stories. Hero MotoCorp Ltd’s shares are down 26% from its 52-week high of ₹6,246.25 per share on 24 September. It appears that the stock, too, has been suffering due to the general downturn in the stock market as there is no other apparent reason.
For the past two quarters, the two-wheeler maker has clocked the highest ever quarterly standalone revenue and profit after tax. Hero’s retail market share, too, as per Vahan data, is up in the September quarter (Q2FY25) to 31.6% from 31.1% in Q1. The premiumization strategy certainly seems to paying off.
Hero’s average selling price or ASP (excluding spare part sales) per vehicle was up 3.7% year-on-year (y-o-y) to ₹59,257. Recall that the company had launched its first Premia store in October 2023 and now the store count is 58. Premia stores house premium motorcycles such as the Harley Davidson, Karizma, in addition to its electric scooter Vida V1.
In Q2, Hero unveiled three new premium motorcycles variants of Xpulse, Xtreme, etc. So, is there further scope for increasing the ASP? The answer seems to be affirmative as the company’s product mix is still dominated by the economy and executive 100 cc segment that accounts for about 80% of the sales volume. In Q2, revenue from vehicle sales (excluding spare part sales) rose 11.3% y-o-y to ₹9,007 crore with 70% of the growth coming from volume and remaining from higher ASP.
Further breaking down the volume growth mix, the management stated that rural growth has been higher than urban. Also, quick commerce industry aided volume growth, accounting for 30,000 units of sales volume. Spare parts too recorded highest ever quarterly sales of ₹1,456 crore, up 7.5%.
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