HERO MOTOCORP 2023-24 Annual Report Analysis

Mon, 22 Jul

HERO MOTOCORP has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

HERO MOTOCORP Income Statement Analysis

• Operating income during the year rose 10.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.0% in FY24 as against 11.6% in FY23.
• Depreciation charges increased by 4.5% and finance costs decreased by 27.2% YoY, respectively.
• Other income grew by 52.3% YoY.
• Net profit for the year grew by 33.7% YoY.
• Net profit margins during the year grew from 8.2% in FY23 to 9.9% in FY24.

HERO MOTOCORP Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	341,584	377,886	10.6%
Other income	Rs m	5,690	8,668	52.3%
Total Revenues	Rs m	347,274	386,554	11.3%
Gross profit	Rs m	39,725	48,988	23.3%
Depreciation	Rs m	5,731	5,990	4.5%
Interest	Rs m	1,049	764	-27.2%
Profit before tax	Rs m	38,636	50,902	31.7%
Tax	Rs m	10,637	13,480	26.7%
Profit after tax	Rs m	27,999	37,422	33.7%
Gross profit margin	%	11.6	13.0
Effective tax rate	%	27.5	26.5
Net profit margin	%	8.2	9.9

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HERO MOTOCORP Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 70 billion as compared to Rs 60 billion in FY23, thereby witnessing an increase of 17.2%.
• Current assets rose 9% and stood at Rs 103 billion, while fixed assets rose 11% and stood at Rs 171 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 274 billion as against Rs 249 billion during FY23, thereby witnessing a growth of 10%.

HERO MOTOCORP Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	166,199	176,533	6.2
Current Liabilities	Rs m	60,126	70,484	17.2
Long-term Debt	Rs m	201	0	-100.0
Total Liabilities	Rs m	248,957	274,315	10.2
Current assets	Rs m	94,353	103,155	9.3
Fixed Assets	Rs m	154,604	171,160	10.7
Total Assets	Rs m	248,957	274,315	10.2

HERO MOTOCORP Cash Flow Statement Analysis

• HERO MOTOCORP's cash flow from operating activities (CFO) during FY24 stood at Rs 49 billion, an improvement of 88.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -18 billion, an improvement of 333.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -27 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 4 billion from the Rs 453 million net cash flows seen during FY23.

HERO MOTOCORP Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	26,138	49,231	88.3%
Cash Flow from Investing Activities	Rs m	-4,213	-18,279	-
Cash Flow from Financing Activities	Rs m	-21,472	-27,166	-
Net Cash Flow	Rs m	453	3,786	736.2%

Current Valuations for HERO MOTOCORP

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 187.2, an improvement from the EPS of Rs 140.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5,463.7, stands at 28.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.2 times, while the price to sales ratio stands at 2.9 times.
• The company's price to cash flow (P/CF) ratio stood at 16.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	1,709.3	1,890.2
TTM Earnings per share	Rs	140.1	187.2
Diluted earnings per share	Rs	140.0	187.2
Price to Cash Flow	x	13.9	16.9
TTM P/E ratio	x	16.8	28.3
Price / Book Value ratio	x	3.1	4.2
Market Cap	Rs m	508,687	735,057
Dividends per share (Unadj.)	Rs	100.0	140.0

Ratio Analysis for HERO MOTOCORP

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY24, from 1.6x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 67.7x during FY24, from 37.8x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 21.2% during FY24, from 16.8% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 29.3% during FY24, from 23.8% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 13.9% during FY24, from 11.7% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.6	1.5
Debtors’ Days	Days	3	3
Interest coverage	x	37.8	67.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.7	13.9
Return on equity	%	16.8	21.2
Return on capital employed	%	23.8	29.3

To see how HERO MOTOCORP has performed over the last 5 years, please visit here.

HERO MOTOCORP Share Price Performance

Over the last one year, HERO MOTOCORP share price has moved up from Rs 3,100.2 to Rs 5,463.7, registering a gain of Rs 2,363.5 or around 76.2%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 57,103.9 (up 1.1%). Over the last one year it has moved up from 35,748.8 to 57,103.9, a gain of 21,355 points (up 59.7%).

Overall, the S&P BSE SENSEX is up 20.6% over the year.

(To know more, check out historical annual results for HERO MOTOCORP and quarterly results for HERO MOTOCORP)