Hero MotoCorp (HEROMOTOCO) Q4 03/04 earnings summary

Executive summary

• FY03-04 motorcycle sales reached 2.07 million, up 23.4% YoY; motorcycle market share rose to 48% and two-wheeler share to 37%.

• Total income rose 15.5% to Rs.5,997 crore; PAT increased 25.4% to Rs.728 crore, with OPBT up 14.6% to Rs.907 crore.

• Leadership continued for a third consecutive year as the world's largest two-wheeler manufacturer; Splendor remained the world's largest-selling model for a fourth year.

Financial highlights

• Net sales rose 14.3% to Rs.5,832 crore from Rs.5,102 crore; total income reached Rs.5,997 crore versus Rs.5,195 crore.

• PBT increased 21% to Rs.1,072 crore; PAT rose 25.4% to Rs.728 crore from Rs.581 crore.

• OPBDIT grew 14.7% to Rs.979 crore; OPBDIT margin improved to 16.8% from 16.7%, and OPBT margin to 15.6% from 15.5%.

• Other income increased to Rs.165 crore from Rs.93 crore, including Rs.106 crore profit on sale of non-trade investments.

• Basic and diluted EPS was Rs.36.47 versus Rs.29.08; total dividend recommended was 1,000% of face value, including 500% interim dividend already paid.

Outlook and guidance

• Medium-term industry outlook was positive but volatile; double-digit two-wheeler and motorcycle market growth was anticipated over three years, with sales growth targeted at double digits.

• Motorcycle market growth of 12–15% was expected in FY04-05; two new models were planned, with scooter-market entry also under consideration.

• A third plant was under consideration, with location and viability studies in progress; installed capacity stood at 2.8 million vehicles annually.