Hero MotoCorp shares fall the most in two years ahead of Q2 results; Here's what to expect

Shares of two-wheeler manufacturer Hero MotoCorp Ltd. fell as much as 5% on Wednesday, November 13 ahead of its September quarter earnings report, which is scheduled for Thursday.

With Wednesday's drop, the stock is down 28% from its record high of ₹6,246, which the stock had hit on September 24 this year.

Hero MotoCorp will report its September quarter results on Thursday where revenue growth of 9% year-on-year is expected to be driven by volume growth. Margins are also likely to expand on a year-on-year basis courtesy of higher realisations and a better product mix.

A CNBC-TV18 poll expects a 50 basis points expansion in EBITDA margin for Hero MotoCorp to 14.6% from 14.1% during the same quarter last year.

Hero Moto's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is likely to increase by 13% from the year-ago quarter to ₹1,496 crore, according to the CNBC-TV18 poll.

Here are some of the factors to watch out for ahead of Hero's results :

Hero's volumes have grown 7% during the quarter on a year-on-year basis. However, when compared sequentially, the volumes declined by 1%.

Hero's realisations are likely to remain flat during the quarter, a potential growth of 1% year-on-year and 2% quarter-on-quarter.

Commentary on market share from Hero will also be important to watch as UBS, in a note dated September, had mentioned that the company's market share had declined 320 basis points this year and it expects that to accelerate as soon as scooters hit an inflection point and Electric Vehicles displace ICE vehicles.

UBS reiterated its "sell" rating on Hero MotoCorp and its lowest target on the street for the stock at ₹3,300.

Shares of Hero MotoCorp are trading 4.5% lower at ₹4,510.1. The stock is still up 9.5% on a year-on-year basis.