Hero Moto aims to launch a new product every quarter

Meanwhile, it believes that the repricing of its electric scooter Vida will help accelerate faster EV penetration.

This remarks come after Hero Moto’s margin came in at 13 percent for Q4 of last fiscal, reflecting an improvement of 180 basis points on a year-on-year basis, driven by lower commodity costs, higher savings, and judicious price increases.

The company reported sales of 12.70 lakh units in the fourth quarter of last financial year up 7 percent compared with 11.89 lakh units in the same period of 2021-22 fiscal. For the full year FY23, it sold 53.29 lakh vehicles compared with 49.44 lakh units in FY22.

Analysts polled by CNBC-TV18 had earlier said the volume growth during the quarter would likely be driven by a healthy recovery in urban demand, traction during Navratri and channel filling, ahead of BS6-II norms. On the other hand, operating leverage was expected due to price hikes to pass on higher raw material prices.

In a note post Hero Moto’s Q4 results, brokerage firm Goldman Sachs said the better operating leverage came against the backdrop of favourable seasonality and that there was rationale for gross margin upside in the context of a similar product mix versus Q3.

It credited price cuts as one of the factors behind sales of VIDA Electric 2-wheeler. Niranjan Gupta, Chief Executive Officer (CEO), Hero MotoCorp, said, "We are accelerating our EV roll out, with plan to be in 100 cities within this calendar year. Apart from exclusive Vida outlets in certain cities, we will be using our existing distribution system across cities to ensure wider reach. The recent price revision now makes Vida accessible to more customers, and we expect this will increase the EV transition in the scooter category."

UBS, meanwhile, said Hero’s revenue growth was broadly in-line and implied an average selling price (ASP) growth of a percent on a quarter-on-quarter basis and 5 percent YoY. The brokerage added that PAT beat was higher at 15-17 percent, potentially aided by higher income on investments.

Hero MotoCorp’s market share in the domestic motorcycle segment has declined to 45.8 percent in the first nine months of the financial year 2023 from 53 percent in financial year 2016.