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Hero MotoCorp rises 3% as firm announces price hike from July 1

Hero MotoCorp said it would raise the prices of its two-wheelers with effect from July 1
The price revision has been necessitated to offset the growing overall cost inflation
The stock closed 75.90 points or 2.84% at Rs 2,750

Shares of Hero MotoCorp rose nearly 4% at Rs 2,767 on the BSE in Friday’s intra-day trade after the two-wheeler company said it would raise the ex-showroom prices of its motorcycles and scooters with effect from July 1 to partially offset the steadily growing input cost inflation.

The two/three-wheeler maker's shares traded higher for the fourth straight trading day and have rallied 13% during the period. With the recent rally, the stock has recovered 29% from its 52-week low of Rs 2,148, touched on March 8, 2022. The stock had touched a 52-week high of Rs 2,980 on July 2, 2021.

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Hero MotoCorp stock closed 75.90 points or 2.84% at Rs 2,750.

"Hero MotoCorp will make an upward revision in the ex-showroom prices of its motorcycles and scooters, with effect from July 1, 2022. The price revision will be up to Rs 3000. The exact quantum of increase will be subject to the specific model and market," the company said in an exchange filing on Thursday after market hours.

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The price revision has been necessitated to partially offset the steadily growing overall cost inflation, including commodity prices, the company said.

Competitor Bajaj Auto also hiked prices in May, citing higher input costs across all models.

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In another filing on June 21, 2022, Hero MotoCorp the world’s largest manufacturer of motorcycles and scooters, announced the introduction of Euro-5 compliant variants of its three globally popular products in Turkiye.

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Hero MotoCorp reported a 27.5% decline in standalone net profit of Rs 627.05 crore for the fourth quarter ended March 31, 2022, on the back of low volumes, The company had reported a net profit of Rs 864.97 crore in the same quarter of the previous financial year. Revenue from operations fell 14.6% to Rs 7421.73 crore in the March 2022 quarter from Rs 8685.97 crore in the year-ago period.

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Total expenses in the reported quarter stood at Rs 6759.28 crore, a fall of 11.6% over Rs 7,644.23 crore reported in the March quarter of fiscal 2021. EBITDA (Earnings before interest, tax, depreciation, and amortization) margin for the quarter was 11.2%.

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Analysts at HDFC Securities said, "We expect Hero MotoCorp to gradually recover its lost market share in motorcycles over the next 2-3 years, led by gradual economic recovery driving consumption from the mid-to-low income consumers – a key segment for the company and revival in rural economy".

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Management expects the two-wheeler industry to have double-digit growth in the fiscal year 2022-23 on the back of favorable indicators that include marriage season demand, good festive demand in key regions in April, and positive rural sentiment following healthy crop output.

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Hero MotoCorp rises 3% as firm announces price hike from July 1

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