HEROMOTOCO - Hero MotoCorp Limited Share Price

Question: "Can you give us a bit more color on the festive trend regarding the growth, particularly post-GST? Specifically, can you break down the 17% growth by segment and provide urban versus rural insights?"

Answer: Our festive growth was around 17%, with a strong recovery in the 100cc segment, particularly for our Splendor and HF models. While scooters also performed well, rural markets initially lagged due to rain disruptions but picked up as harvests were realized. The GST reduction significantly boosted demand, allowing us to finish our festive period strong. We're confident that the momentum will continue into November.

Question: "Regarding margins, with segments like ICE scooters and exports growing, how should we view the margin mix going forward?"

Answer: We will consistently invest in brand building and product innovation while focusing on margin expansion. Our guidance remains within EBITDA margins of 14% to 16%. Investments in EV and global businesses are crucial, but we remain vigilant about maintaining our margins as volume growth aids in operating efficiency.

Question: "Given the GST announcements, how should we understand demand momentum going forward? Are you expecting any preponements or declines?"

Answer: The growth we reported reflects a blend of pre-GST and post-GST performances. Demand indicators, including rural recovery and festive enthusiasm, suggest that we may see sustained momentum, with good prospects for the upfront marriage season. We anticipate overall growth in H2 despite seasonal fluctuations as historical patterns suggest.

Question: "Can you provide insights into the growth expectations by segment given the overall plans for 10% growth in the second half?"

Answer: The growth forecast for 8% to 10% mainly comes from the recovery in the 100cc and scooters segments. We see strong traction in both, primarily encouraged by new customers entering these categories. Meanwhile, the overall sentiment and economic environment support our efforts to outperform market trends.

Question: "With regard to the ABS implementation, do you have any updates on its timing?"

Answer: We are in ongoing discussions with the government regarding the ABS regulation's effective date. While we anticipate a positive conclusion soon, the final timeline remains uncertain. We prioritize customer safety and aim to adopt the most effective technological solutions.

Question: "How do you view the outlook for rural market demand post-monsoon, especially regarding the entry segment?"

Answer: Despite short-term disruptions from the monsoon, we expect rural markets to rebound as income improves and with good rabi crop forecasts. Our strategies, along with the GST cuts, will help to enhance demand in rural areas, spurred by necessity-driven purchases. Early signs of recovery bolster our confidence.

Question: "What is the current state of financing availability for customers, and how does it impact your sales outlook?"

Answer: Financing conditions remain stable overall, supporting our sales momentum. While we note temporary fluctuations, the fundamentals suggest that financing will continue to facilitate purchases and drive industry growth, particularly as we move deeper into H2.

Question: "Can you clarify if the 8% to 10% growth expectation pertains to retail or wholesale performance?"

Answer: The expectation pertains to retail growth, which we believe will largely align with wholesale trends in the second half. Our year-to-date figures indicate that retail and wholesale have been closely matching, setting a favorable expectation for continued growth.

Question: "With changes in commodity prices impacting input costs, how do you foresee these affecting margins in the coming quarter?"

Answer: While commodity prices for some inputs may trend upward, our focus on cost management through our LEAP program has helped keep them largely flat. We expect some inflationary pressures in Q3 but anticipate only a 1-2% rise, which we aim to manage without significantly affecting our margins.