hero motocorp financial analysis report

Hero MotoCorp

Financial StatementAnalysis

INTRODUCTION• Hero Motors Ltd. is the world's largest manufacturer

of two wheelers, based in India.• The company was a joint venture between India's

Hero Group and Honda Motor Company, Japan that began in 1984 later in 2011 it turn into Hero Motors Limited.

• In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and the “World No.1” two-wheeler company in terms of unit volume sales in a calendar year by a single company. Hero has retained that coveted position till date.

• Today, every second motorcycle sold in the country is a Hero Honda bike. Every 30 seconds, someone in India buys Hero Splendor which is India’s selling motor cycle.

VISIONThe story of Hero Honda began with a simple vision – that of a mobile and empowered India, powered by its bikes. The Company’s new identity – Hero MotoCorp Ltd. – reflects its commitment towards providing sturdy and solid world-class mobility solutions with a renewed focus on steadily moving ahead and expanding the footprint in the global arena.

MISSION

Hero MotoCorp’s mission is to become a global enterprise fulfilling its customers’ needs and aspirations for mobility, solidity and sturdiness.

The company aims to set benchmarks in technology, style and quality to convert its customers into brand advocates. The company provides an engaging environment for its people to perform to their true potential. It aims to continue its focus on value creation and enduring relationships with its partners.

MANUFACTURING

Hero MotoCorp two wheelers are manufactured across 3 globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand. The combined annual installed capacity is approx. 6.90 million units.

DISTRIBUTION

The Company's growth in the two wheeler market in India is the result of an intrinsic ability to increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and service network now spans over to 6000 customer touch points. These comprise a mix of authorized dealerships, service & spare parts outlets and dealer-appointed outlets across the country.

TREND ANALYSISAn aspect of technical analysis that

tries to predict the future movement based on past data.

Based On Overall Performance

2013

2012

2011

2010

2009

1.00 3.00 5.00 7.00 9.00 11.00 13.002013 2012 2011 2010 2009

Return on as-sets(%)

2.50641747003883

2.42129575322684

1.81494862039752

1.88886894307112

1.38302766935898

Return on eq-uity(%)

4.82717568474542

5.5815731625729

6.66021663971636

4.64614922857588

3.30592646188252

Return on in-vested capital

4.41713261085329

4.31619401962691

4.18898964667632

4.36088718415465

3.11607213713197

2013 2012 2011 2010 2009

Gross Profit Margin(%)

0.0831409537499985

0.0950286204785479

0.085074875156593

0.133010104477293

0.0946608196504643

0.01

0.03

0.05

0.07

0.09

0.11

0.13

Gross Profit Margin(%)

Based On Profitability Ratio

2013 2012 2011 2010 2009

Net profit margin/Return on sale(%)

0.948623365591343

0.956839902749519

0.868752148383291

0.959377093180968

0.927779406324559

0.83

0.85

0.87

0.89

0.91

0.93

0.95

0.97

Net Profit Margin/Return On Sale(%)

2013

2012

2011

2010

2009

10.00 30.00 50.00 70.00 90.00 110.00 130.002013 2012 2011 2010 2009

Earnings per share 106.1 119.1 96.5 111.8 64.8

Earnings Per Share

2013

2012

2011

2010

2009

0.50 1.50 2.50 3.50 4.50 5.50 6.50 7.50 8.502013 2012 2011 2010 2009

Asset turnover(times)

2.64216290780105

2.53051293771211

2.08914432473642

1.9688493257727

1.49068588926533

Invested Capital turnover

4.65636075503978

4.51088422130407

4.82184666187228

4.54554024184111

3.35863473137053

Equity turnover

5.08861141295664

5.83334071513326

7.66641746107993

4.8428811377712

3.56326777609683

Equity , Invested Capital & Asset Turnover

Based On Investment Utilization

2013

2012

2011

2010

2009

0.10 0.30 0.50 0.70 0.90 1.10 1.302013 2012 2011 2010 2009

Current Ratio

1.21745374854939

1.11275521485959

0.244854550632654

0.596633280967663

0.493706218762483

Acid test Ratio(Quick Ratio)

0.0434077896170409

0.0176945898135182

0.0116392041987062

0.394752256587621

0.106960181603843

Current Ratio & Quick Ratio

2013 2012 2011 2010 2009

13.4714.36 13.94

10.488.98

Capital IntensityCapital Intensity


2013 2012 2011 2010 2009

2.28

0.58

0.83

1.74

0.44

Days CashDays Cash

2013 2012 2011 2010 2009

9.12

9.85

8.45

9.49

8.81

Days InventoryDays Inventory

2013 2012 2011 2010 2009

9.53

3.97

2.10 2.36

4.04

Days ReceivableDays receivable

2013 2012 2011 2010 2009

40.01

37.04

43.17

38.45

41.44

Inventory TurnoverInventory Turnover

2013 2012 2011 2010 2009

Working capital Turnover

28.0890586925121

51.1195456773982

-4.8839463124

2753

-8.6106433090

6237

-13.030596634

3702-15.00

-5.00

5.00

15.00

25.00

35.00

45.00

55.00

Working Capital Turnover

2013 2012 2011 2010 2009

Financial Leverage

1.92592644379814

2.30520090539718

3.66964472980927

2.45975203606327

2.39035453528909

0.25

0.75

1.25

1.75

2.25

2.75

3.25

3.75

Financial Leverage

Based On Financial Condition

2013 2012 2011 2010 2009

Debt Equity Ratio

0.0928301479753268

0.293170125622695

0.589933898500031

0.0654137638455193

0.0609274485298954

Debt Capital-ization

0.0849447172987605

0.226706540627456

0.37104303459193

0.0613975209118887

0.0574284778985795

0.05

0.15

0.25

0.35

0.45

0.55

Debt Equity Ratio & Debt Capitalization

2013 2012 2011 2010 2009

Times Interest Earned

212.342569269521

85.7014657493274

85.2836879432624

254.219030520646

136.579754601226

25.00

75.00

125.00

175.00

225.00

275.00

Times Interest Earned

2013 2012 2011 2010 2009

0.13

0.040.06

0.49

0.09

Cash Flow to DebtCash Flow to debt

TREND ANALYSIS BASED ON

COMPETITION WITH COMPETITORS-WHO?-WHERE?-WHAT?-HOW MUCH?

Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto

0.22

0.29

0.04

0.17

0.21

Return on AssetsReturn on Assets

Based On Overall Performance


0.42

0.39

0.09

0.22

0.35

Return on EquityReturn on Equity


0.400.38

0.07

0.22

0.35

Return on Invested CapitalReturn on invested Capital


1.02 1.04 0.90

8.01

0.89

Gross Profit MarginGross profit margin

Based On Profitability Ratio


0.09 0.15 0.02

6.50

0.06

Return on Sale/Net Profit MarginReturn on Sale


106.07 105.18

2.44

42.74

23.62

Earnings Per ShareEarning per share

Hero Mo-tocorp

Bajaj Auto TVS Motor Mah Scooters Atul Auto

2.47

1.93

2.48

0.03

3.32

Asset TurnoverAsset Turnover



4.48

2.51

4.37

0.03

5.50

Invested Capital TurnoverInvested Capital turnover


4.75

2.53

6.31

0.03

5.50

Equity TurnoverEquity Turnover


6.56 3.11 8.90 0.03

332.07

Capital IntensityCapital Intensity


2.41 12.29

-1.89

1115.79

43.02

Days Cash

Days cash

Hero Mo-tocorp


9.7811.61

24.06

27.70

20.51

Days InventoryDays Inventory

Hero Mo-tocorp


10.210.00

14.18

122.96

6.39

Days ReceivableDays receivable

Hero Mo-tocorp


27.44

23.20

10.03

5.72

12.34

Inventory TurnoverInventory Turnover

Hero Mo-tocorp


13.6411.03 11.85

0.27

31.44

Working Capital TurnoverWorking Capital Turnover

Hero Mo-tocorp


1.60

3.71

1.53

1.90

1.36

Current RatioCurrent ratio

Hero Mo-tocorp


0.06

0.84

0.01

1.04 1.07

Quick RatioQuick Ratio


1.93

1.31

2.55

1.26

1.65

Financial LeverageFinancial Leverage

Based On Financial Condition


0.060.01

0.45

0.00 0.00

Debt Equity RatioDebt Equity Ratio

Hero Mo-tocorp


0.06

0.01

0.31

0.00 0.00

Debt CapitalizationDebt capitalization

Hero Mo-tocorp


312.37

8205.07

7.12 0.00 105.18

Times Interest EarnedInterest Earned

Hero Mo-tocorp


6.26

29.95

0.77 0.00 0.00

Cash Flow to DebtCash Flow to debt


28.28

4.28

49.18

4.682.54

Dividends PayoutDividends payout

Based On Dividend Policy

CONCLUSION

Bajaj Auto

Hero Moto-corp

TVS Mo-tor

Mah Scooters

Atul Auto

LML Kinetic Motor

Last Price 2127.7 2111.15 50.2 400 258.5 5.75 7.1

250.00

750.00

1,250.00

1,750.00

2,250.00

Last Price

58%

39%

2% 0% 0%0%0%

Market Capital (Rs. Crore)Bajaj Auto Hero Motocorp TVS MotorMah Scooters Atul Auto

Bajaj Auto

Hero Moto-corp

TVS Mo-tor

Mah Scooters

Atul Auto

LML Kinetic Motor

Sales Turnover

19997.25

23768.10999999

99

7065 6.7 363.84 243.73 5.67

2,500.00

7,500.00

12,500.00

17,500.00

22,500.00

Sales Turnover

Bajaj Auto

Hero Moto-corp

TVS Mo-tor

Mah Scooters

Atul Auto

LML Kinetic Motor

Net Profit

3043.57 2118.16 116.02 48.84 25.92 -65.45 1.48

-250.00

250.00

750.00

1,250.00

1,750.00

2,250.00

2,750.00

3,250.00

Net Profit

Bajaj Auto

Hero Moto-corp

TVS Mo-tor

Mah Scooters

Atul Auto

LML Kinetic Motor

Net As-sets

9300.349999999

96

5308.4 1770.53 224.59 74.31 -424.86 58.54

-1,000.00

1,000.00

3,000.00

5,000.00

7,000.00

9,000.00

Net Assets

hero motocorp financial analysis report

Economy & Finance

hero motocorp

profitability

investment

company

india

based

world

customers