Hero MotoCorp expecting single-digit growth in FY20, says CFO Gupta

Hero MotoCorp is looking at mid-single digit growth for the full year, its CFO Niranjan Gupta told CNBC-TV18. The management also spoke about the BS-6 transition and GST rates.

Talking about the growth outlook, Gupta said, "It would come back in the second half of the fiscal and so expect growth to be in mid-single digits for the current fiscal. Right now the demand environment is a bit subdued because of insurance, liquidity issues that the industry has faced. We expect these factors to wane out now as more and more customers absorb the insurance and with improvement in liquidity situation."

According to Gupta, there is a strong logic for two-wheelers to be classified under 18 percent tax bracket because 28 percent bracket is for luxury goods and "by no stretch of imagination can one put commuter 2-wheelers under a 28 percent tax bracket."

"So the key demand of the industry from the new government would be to reduce the GST rate for two-wheelers from 28 to 18 percent bracket. Moreover, GST rates at 28 percent along with BS-VI  would hike costs. So reduction in GST rates would help the industry and customers absorb the hike that comes in from BS-VI compliance and stimulate demand back because a lot of jobs are also dependent on auto sector,” Gupta added.

With regards to the inventory levels, Gupta said, "The inventory levels for the company have been brought down to 45-50 days, which is not a panic level but would like to bring it down further by 5-7 days."