Participants:
- Systematix
- Axis Capital
- Nomura Securities
- JP Morgan
- Antique
- Equirus Capital
- CLSA
- Avendus Capital
- Kotak Securities
- Motilal Oswal Financial
- Sundaram Mutual Fund
- Edelweiss Securities
- ICICI Securities
Business Overview:
- Q4FY20 Revenue at Rs 6,334 crore vs Rs 7,953 crore YoY
- Q4FY20 PAT at Rs 605 crore vs Rs 771 crore YoY
ConCall highlights:
- Lost sales of 2.3 lakh unit in the last 9 days of March, including this sales would have been Rs 7,400 crore
- EBITDA margin at 10.6%; excluding one-off impact margin would have been 13.5%. Company has provided support of Rs 110 crore to dealers to liquidate BS-4 vehicle; 10,000-15,000 per vehicle. Company has also provided for fiscal benefits to the tune of Rs 67 crore
- Company has maintained market share in entry and deluxe segment; newly launched Xtreme 160R would improve its position in premium segment. Hero will start dispatch Xtreme 16R in couple of weeks time
- Brought down the dealer inventory by 5.5 lakh units during this financial year
- All pants are now operation and volumes are getting ramped up gradually. Raw materials are available from vendors; 90% outlets are open now
- Many of the dealers have reached 70-80% pre-Covid volume
- Demand is gradually picking up; enquiries have increased and conversion rate is very good
- Financing penetration has increased. Financed portion for FY20 was 46% vs 41% in FY19; 40%+ for Q1FY21. Liquidity position is strong in Hero FinCorp as the company recently raised money
- 43% of Hero’s sales in FY20 went through financing and out of that Hero FinCorp’s share was 46%
- Hero has increased prices in the month of May to improve dealer margin
- Labor availability has been improving as migrants workers are flowing back
- Rural and semi urban likely to perform better than urban market this year. Close to 50% business comes from rural India
- Hero started this financial year with 5.5 lakh BS-6 vehicle inventory
- Company has reduced its capex guidance for FY21 to Rs 600 crore from Rs 1,000 crore projected earlier but not reduced R&D expenses
- Market share in scooter segment will improve in FY21 as newly launched product has received good response and many new products are lined up for launch
- Spare parts revenue for Q4FY20 was Rs 751 crore and for FY20 was Rs 2,896 crore
- All the BS-4 vehicle at dealers level have been sold
Read more concall summaries here.
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