Shares of Hero MotoCorp tumbled 6.5 percent from their 52-week high level of Rs 3,243, touched in the intra-day trade on Tuesday, after reports said the Enforcement Directorate (ED) raided the residence of Hero MotoCorp Chairman and Managing Director Pawan Munjal after taking cognizance of a Directorate of Revenue Intelligence (DRI) case.
The stock hit an intra-day low of Rs 3,032.10 during the day, falling 5.3 percent from the previous day’s close of Rs 3,203. At 1:45 PM, shares of the two-wheeler major were around 4 percent down against an unchanged benchmark S&P BSE Sensex.
According to a CNBC TV-18 report, a case has been registered against Munjal under the Prevention of Money Laundering Act (PMLA), 2002. The DRI had recently apprehended a close aide of Pawan Munjal who possessed undeclared foreign currency.
In March, income tax (I-T) officials carried out a search at the offices of Hero MotoCorp as well as Munjal’s residence. As part of the raid, I-T officials searched premises across Gurugram, Haryana, Delhi, and a few other locations.
Meanwhile, the company is scheduled to announce its June quarter results on August 10, 2023.
Analysts at Sharekhan expect Hero Moto’s revenue to rise 5.7 percent year-on-year/6.8 percent quarter-on-quarter to Rs 8,873.6 crore in Q1FY24 on account of a 6.5 percent QoQ increase in volumes.
Ebitda’s margin is expected to expand by 30bps QoQ to 13.3 percent due to operating leverage. Net profit, meanwhile, is projected to rise 38 percent YoY/flat QoQ to Rs 859.7 crore.
“Volume grew by 6.5 percent QoQ and declined by 2.3 percent YoY. We expect the company’s revenue to grow by 7.5 percent/8.6 percent YoY/QoQ, led by higher volume and better average selling price (ASP). We expect Ebitda margin to expand by 40bps QoQ and 220bps YoY on the back of improved operating leverage and price hikes,” concurred those at Nirmal Bang.
