Hero Motocorp’s Performance During the FY’2012

Hero MotoCorp Ltd. (HMCL) has reported record results for the Financial Year 2012 – the first complete financial year since embarking on its solo journey. Solo as the company decided the break the tie up which existed with its erstwhile Japanese competitor – Honda.

Fueled by its landmark sales of over 62,35,205 units in this fiscal, the company registered a total  turnover (Net Sales & Other Operating income) of Rs 23579 crores, as compared to Rs.19,397 crores reported for the last fiscal. The company reported profit after tax (PAT) of Rs 2378.13 crores and an operating margin of 10.69 per cent, in the fiscal. The company’s PAT in the previous year (2010-11) was Rs 1927.90 crores.

Riding on its highest ever quarterly sales of 15,72,027 units of two – wheeler, the company’s total turnover (Net Sales & other Operating Income) in the Q4 of FY’12 grew to Rs. 6035 crores, a growth of 11.95 per cent over Rs. 5391 crores, recorded in the corresponding quarter in last fiscal. EBIDTA margin for the quarter stood at a healthy 15.33 per cent.  The strength of the operations and the resultant strong financial position translates into a dividend payout of Rs. 45 per share.

Regarding this performance, Dr. Brijmohan Lall, Chairman, Hero MotoCorp Ltd, said, “The financial year 2011 – 12 has been a phenomenal and exciting year for us. This was our first full year since we began our solo journey and we have created a record by selling more than six million two – wheelers during this period. It amply reiterates the kind of trust our customers repose in us and our products. We are committed to keep bringing such innovative products for the customers across segments and provide them the best of after-sales service.”

Mr. Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp Ltd., said “FY’12 was a year when we demonstrated not just our intent and vision for the future, but also our ability to consistently deliver. Even as we successfully made the transition to a new brand identity, and created an anthem for the country’s youth with the “Hum Main Hai Hero” campaign, we went on setting new industry benchmarks. It gives me sense of satisfaction to see that we are successfully playing our small role in the progress of our country. Even as the rest of the world was talking about an economic slowdown, we added over 62 lakh new two-wheelers on the country’s roads in just 12 months.

Foraying into the Exports

As we, at  BikeAdvice has been reporting for a long time, HMC is very seriously considering the idea of foraying into the export market. Here is what Mr. Munjal had to say about this. “We are, however, not going to rest on our laurels. We are raising the bar to bring in technologically-advanced two-wheelers with value-added features. We are actively looking at new markets in Africa, Latin America and other parts of the world to expand our global footprint. Our exports to some of these markets will commence in the first half of this fiscal. And to be able to meet growing demand for our products, we are also adding capacity at our three existing plants. We will also be soon announcing the details of a Parts Centre to cater to our rising volumes. And while all these initiatives take shape, we will also be adding about 400 more touch points this year to our already large distribution network. Undoubtedly, FY’13 is certainly going to be yet another action-packed year for us at Hero.”

During this year, the company also managed to get into few alliances for the development of new vehicles and for the existing line – up as well. Hero MotoCorp forged alliances with the US – based Erik Buell Racing (EBR) and Austria – based AVL to quickly scale-up and supplement its own in-house R&D capabilities and engine technologies. Through the strategic partnership with EBR, Hero MotoCorp also made its debut in the exciting world of international motorcycle racing, by participating at the AMA Pro Racing National Guard Superbikes Championship in the US.

In order to partially off-set the rising input costs, Hero MotoCorp has raised prices on most of its products in the range of Rs 500/- to Rs 1000/-. This new pricing has been in effect from 2^nd of May.

Talking about the new product front, Hero MotoCorp launched two new models in addition to few refreshes during the year. “Impulse” which is the first Hero branded bike introduced an entirely new segment in the Indian two-wheeler market, the “off-road on-road” segment. The company also launched a new 110cc scooter “Maestro”, further strengthening its steadily growing presence in the gearless scooter segment.

During the Auto Expo in Delhi in January early this year, Hero MotoCorp showcased a concept Hybrid scooter – “Leap”. It also unveiled a 110cc Passion X Pro and a thrilling new 125cc bike, Ignitor – to be launched in the domestic market over the next few months.

Taking forward its association with sports, Hero MotoCorp sponsored the men’s and women’s hockey qualifying events for the London Olympics 2012. The event, titled “Hero FIH Road to London” and held in Delhi in February, saw the Indian men’s hockey team qualify for the London Olympics.

Adding to its illustrious list of young achievers as brand ambassadors, Hero MotoCorp brought on board current heartthrob of Hindi cinema Ranbir Kapoor during the year.

Hero MotoCorp received a slew of awards for its performance and products during the year. “Impulse”, the first Hero-branded motorcycle and the country’s first on-road-off-road bike, was adjudged the “Bike of the Year” at the ET Zigwheels Awards and BS Motoring Awards 2012. The trans-roader also won the “Motorcycle of the Year (up to 150 cc)” at the NDTV Car & Bike Awards 2012, at the ET Zigwheels Awards, and also at the Car India & Bike India Awards.

Hero MotoCorp also received accolades for its highly-innovative rebranding initiative. This initiative won the CNBC Awaaz-Storyboard special commendation for “Effective Rebranding of a New Corporate Entity” at the CNBC Awaaz Consumer Awards 2011. The company also won the “Most Recommended Two-Wheeler Brand of the Year” award at the same awards.

Let’s wait and watch the way the company would perform in the coming financial year where it has got bunches of new plans to go ahead with.