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- 13 Nov 2024
- ICICI Securities
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MUTED SHOW IN Q2FY25; GUIDES FOR BETTER PERFORMANCE WITH NEW LAUNCHES IN PIPELINE.
News: HMIL reported muted performance in Q2FY25. Sales volume for the quarter stood at 1.9 lakh units, down 9% YoY. Total operating income for Q2FY25 came in at ₹17,260 crores with ensuing ASPs at ₹8.8 lakh/unit, down 1% QoQ. SUV share of sales in total domestic PV sales volume stood at ~69% (up 2% QoQ). EBITDA margins for the quarter came in at 12.8%, down 72 bps QoQ. Consequent PAT in Q2FY25 came in at ₹1,375.5 crore, down ~15.5% YoY and ~7.7% QoQ.
Views: Slowdown in domestic sales volume showing 6% YoY decline to 1.5 lakh units has impacted the overall performance. Also, the export volumes reported a steepest decline of 17% YoY to 42k units, mainly due to the red sea crisis, which particularly affected sales in middle east, which is a key export market for the company. However, the company has witnessed over 30% increase in registration during this festive season, helping reducing inventory level to 30 days. Moreover, CNG penetration for its flagship model Exter has increased at the highest of 28.4% in Oct’24 vs 22.2% in Q2FY25 vs 18% in Q1FY25. Looking ahead, it anticipates better performance owing to the new launch of Creat EV in Jan’25, along with the recent launch of new variants of the Venue and Alcaazar models. Over the long-term perspective, we remain positive on the stock due to consistent growth outlook amid industry tailwinds, a healthy line up of SUVs, & capital efficient business model (RoE, RoCE: 20%+) with cash surplus b/s.
Impact: Neutral