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© 2012: All rights reserved by Financial Training Academy Pvt. Ltd.
Visit us at www.ftacademy.in | www.facebook.com/ftacademy.in | Contact us at: +91 22 2612 1877 | +91 91672 47821 - 5
Classroom Exercise: Build a Financial Model
Hero MotoCorp (Hero)
Business Description:
Hero is the world’s largest two-wheeler company in terms of volumes. It offers motorcycles in all the 3 segments, i.e. segments—CD Dawn and CD Deluxe in entry; Splendor, Passion and Glamour in executive; and Hunk, Achiever, CBZ and Karizma in premium. It also sells Pleasure in the ungeared scooter segment. The company is listed on BSE & NSE.
About the Two Wheeler Segment:
The Indian Two-Wheeler is a growing segment, with strong double digit consistent growth. It is one of the most resilient sectors, unaffected by adverse factors impacting the automobile industry.
Industry Volumes (MM)
2008
2009
2010
2011
2012
Motorcycles – Domestic
6.07
6.24
7.34
9.02
10.09
Motorcycles – Exports
0.84
1.07
1.10
1.48
1.86
Scooter (Domestic)
1.12
1.19
1.46
2.07
2.56
(Source: ICRA)
Analysts predict the industry growth as follows, with a decrease in the growth at 0.2% p.a.
Industry Growth p.a.
Bear
Base
Bull
Motorcycles – Domestic
5%
10%
14%
Motorcycles – Exports
17%
20%
22%
Scooter (Domestic)
18%
20%
25%
Hero – Key Operating Indicators:
Hero Volumes (MM)
2008
2009
2010
2011
2012
Motorcycles – Domestic
NA
3.53
4.29
4.93
5.65
Motorcycles – Exports
NA
NA
0.09
0.11
0.13
Scooter (Domestic)
NA
NA
0.21
0.36
0.46
Total
3.32
3.72
4.60
5.40
6.24
Installed Capacity
3.40
5.20
5.40
6.15
6.35
(Source: Annual Reports)
Installed Capacity:
As on 31st March 2012, Hero has an installed capacity of 6.35 million units across 17 different products in Motorcycles and Scooters.
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