Shares of Hero MotoCorp fell as much as 4.3 percent in early trade on Thursday after the country's largest two-wheeler maker deferred the launch of its first electric two-wheeler on account of supply constraints amid geopolitical tensions.
At 10:28 am, the stock was trading at Rs 2,668, down 3.28 percent or Rs 90.55 on the BSE. The scrip has been on a losing spree for the last two days in a row and has underperformed the sector by 2.43 percent.
Hero MotoCorp’s Executive Director Vikram Kasbekar blamed geopolitical tensions for supply shortages of various parts including semiconductors. He said, "The ongoing geopolitical situation has resulted in enormous supply chain issues and shortage of various components, including semiconductors."
"Keeping customers as the top-most priority, we, therefore, feel it would be prudent to unveil the first EV product around the upcoming festive period instead of July as earlier announced," Kasbekar said.
Shares of the company fell on Wednesday as well after the company posted its sales figures for the month of May. While the company shows improvement on all counts over its May 2021 sales numbers, its total sales came in below Nomura's estimates of 5,25,000 units.
Experts argued that both 2020 and 2021 aren't proper comparisons as COVID impacted sales in these years. When compared to May 2019 (pre-pandemic), Hero Moto Corp's total sales witnessed a decline of 25 percent.
The company also pointed out that the increase in the third-party insurance rates would adversely impact customer sentiment at a time when the industry has just started to recover, as this will further increase the upfront costs of two-wheelers in India.
"It is not usual to have insurance paid for 3-5 yrs instead of annual renewals, as is generally the case in many countries. The industry seeks government intervention and support in this regard," said Kasbekar.
Exports too fell on a year-on-year (YoY) basis to 20,238 units versus 23,483 units in the same period of last year.
First Published: Jun 2, 2022 12:53 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
