Conference Call      
          Hero Motocorp
Expect industry to post 10-12% growth in FY 13


Hero Motocorp held analyst conference call on 20th Jan 2012 to discuss the quarter performance of Dec 2011 and its future plans. The meeting was presided over by Mr. Ravi Sud, CFO and Anil Dua, Senior VP -Marketing.

Key Takeaways from the Discussion

Expects the two wheeler industry to grow by 10-12% in Q4 FY12 and FY 13.

Retail sales from mid Dec 2011 to mid Jan 2012 was witnessing postponement of purchase from customers. However post mid Jan 2012, the sales are witnessing improvement though it is early to say whether it is starting of growth trend or not.

At the export front, the company is in final stages of deciding partner, distribution, export markets etc. The company will look at entering new markets in next 2-3 quarters.

Expansion of capacity to 7 million units by end of FY 12 is on track. The company targets capacity of 9000 vehicles per day by end of March 2012 and 9500 vehicles per day by mid FY 13 from current 8000 units per day.

Targets over 5000 touch points end of FY 12.

Recorded retail sales of over 1.5 million vehicles in Dec 2011 quarter.

Royalty amortized in Dec 2011 quarter was Rs 228 crore.
The tax rate for Q4 FY 12 would be in line with that in Q3 FY 12 i.e. 15.3%.

The total import content is 17% for the company. Out of this, direct imports accounts for only 1.5-2% (USD denominated) while the indirect imports account for the balance (in USD and Yen).

The company has currently around 200 employees in its R&D team.

Originally posted by rmani84 I feel it may get tougher for Hero Motcorp going forward now that Honda is on its own ... Bajaj Auto, M&M are preferred bets in auto space ...

let me disagree a little- M&M is still yet not a preferred bet in the 2-wheeler industry especially in the backdrop of defects in bikes for which mahindra had rope in Italian firm Engines Engineering.