Hero Motors Shares Rise After Strong Quarterly Profit and Subsidiary Stake Increase

Hero Motors shares jumped over 6.5 per cent in Wednesday's trading session after the company posted strong financial results for the September quarter. The stock opened at ₹161 per share on the National Stock Exchange, up from the previous close of ₹155.19, and touched an intraday high of ₹167.39 on October 14.

Earnings Details

Auto components maker Hero Motors reported a net profit of ₹10.2 crore for the second quarter, more than doubling from ₹4.73 crore in the same period last year. Revenue rose 24.9 per cent year-on-year to ₹319.3 crore, compared with ₹255.7 crore in the year-ago quarter. Earnings before interest, tax, depreciation and amortisation jumped 92 per cent to ₹35.9 crore, while the EBITDA margin improved to 11.3 per cent from 7.3 per cent.

Subsidiary Acquisition

Hero Motors has proposed buying an additional 39 per cent stake in its subsidiary, Hewland Engineering Ltd, from shareholders William Hewland and Siobhan Hewland for about £0.60 million in cash. This deal covers 8,039 equity shares and will raise Hero Motors' stake in the subsidiary from 51 per cent to 90 per cent. The acquisition is expected to finish within six months and needs no government approvals.

Context

Auto component makers often see share price movements following quarterly earnings reports as investors assess their growth and profitability. Companies in this sector supply parts to major vehicle manufacturers globally, linking their business performance to the wider health of the automotive industry.