A path of fire achievements: Hero MotoCorp Ltd in FY21-22.

Hero MotoCorp is the leading scooter and bike company In India and globally. they have crossed the 3 lakh mark in two-wheeler volumes is 3,00,624 units and growth in exports of 57%

• Founded: 1983
• Headquarters: New Delhi (India)
• Brand: HERO
• Product: 2 wheeler
• Listed in Exchange: NSE(HEROMOTOCO), BSE(500182)
• Industry: MOTORCYCLES/SCOOTERS
• website: www.heromotocorp.com
• CSR of the year: ₹88 crores

Chairman & CEO, Hero MotoCorp Ltd: Dr. Pawan Munjal.

“Hero MotoCorp will transform its leadership in the internal combustion engine (ICE) market into the electric vehicle space – globally!” by CEO

Hero MotoCorp ltd, we call them Hero and they are the largest manufacturer of scooters and bikes company globally.

Hero has increased its capacity, geographic footprint, customer touchpoints, and R&D capabilities for its brand.

Hero has increased its portfolio in horizontal lines like spare parts business and services part and also 2 wheeler purchase services such as competitive financing, insurance assistance, extended warranties, and a best-in-class loyalty program, all those things make customers comfortable and make high sales.

Hero has expanded its global footprint to 40+ countries; doubled its manufacturing base to eight plants, including one each in Colombia and Bangladesh, and scaled up house research and development capabilities with a world-class R&D ecosystem in India and Germany.

When the automobile industry is getting upgraded and customers are shifting to Electric vehicles, Hero has involved itself to get an upgrade. This year Hero has introduced a new brand in India.

Hero has migrated to a new future of mobility and has unveiled Vida – Powered by Hero – as a new brand identity for emerging mobility solutions. Through Vida, they have ensured a cleaner, greener, and better future for generations to come.

Hero MotoCorp, continue to leverage partnerships to strengthen its capabilities. In partnership with Gogoro Inc. of Taiwan, which brings the largest battery-swapping network to India.

Hero has discussions with Bharat Petroleum Corporation Limited to set up battery charging infrastructure for EVs across the country.

With the investment in Ather Energy, starting in 2016, Hero MotoCorp is also accelerating its electric journey

On October 28, 2020, when Hero MotoCorp decided to partner with Harley-Davidson in India, As a result, Harley-Davidson’s market share in the 1000cc+ segment 531 units have been sold in FY21-22 which grew to 37%

In August 2021, Hero joined the elite club of the Harley Owners’ Group (HOG) Life Members and discovered first-hand the stories of camaraderie that characterize the world’s largest motorcycle club

Hero has concentrated on the Parts Accessories and Merchandise (PAM) business and achieved both growth and profitability. The PAM business recorded a growth in FY 2021-22 grew 24% to 3,934 crores and 15% YoY, and revenue was 1,000 crore per quarter.

Hero FinCorp is one of the brands belonging to Hero which was launched in the market in 2012 for the welfare of the customer. It has helped serve seven million customers through its 2,000 locations spread across the country.

Hero FinCorp recently raised 2,000 crores in growth capital, which will help it expand its reach and offering and drive two-wheeler sales. Hero FinCorp plans to evolve into a full-service finance company in the near future. This year 41% of 2-wheeler Sales were through Hero FinCorp.

Hero MotoCorp manufacturing facility:

In 10 years they have expanded manufacturing facilities from 3 to 8 world-class facilities across the globe including Colombia and Bangladesh, and assembly lines in several other countries in Africa and Latin America with a 9.5 million Annual Capacity.

In DHARUHERA, India with a 2.1 million capacity
In Gurgaon, India with a capacity of 2.1 million units
In Haridwar, India with a capacity of 2.7 million units
In Neemrana, India with a capacity of 0.8 million units
In Halol, India with a capacity of 1.2 million units
In Chittoor, India with a capacity of 0.4 million units
In Columbia with a capacity of 0.08 million units
In Bangladesh with a capacity of 0.15 million units

HeroMotoCorp Strategy:

• WORLD’S #1 Hero MotoCorp has been the world’s largest two-wheeler company
  • 48.3% of the Indian Motorcycle Market Share
  • 34.6% of the Indian Two-wheeler Market Share

Hero MotoCorp’s new strategy for its Global Business (GB), called ‘R4’ which means Recalibrate, Revitalise, Revolutionise and Revive and was launched in 2021, which has great results Global Business delivered 300,624 two-wheelers in 43 markets during the year under review.

This was a remarkable growth of 57% compared to the total units sold in the previous year. During FY 2021-22, they significantly expanded our presence in the Central and South American markets through strategic partnerships.

Having already commenced retail sales in Mexico, in partnership with Grupo Salinas to become a key player in the market

Hero has partnered with Gilera Motors in Argentina, which is one of the leading automotive companies in the country. Our new partnerships in Central America with Grupo Casa Pellas in Nicaragua and Moves S.S. in Honduras are also extremely promising

Hero MotoCorp Marketing Strategy and Footprint

• Market presence 43 country
• 311 suppliers
• 9000+ Touchpoints

Hero has 311 Suppliers, and 9,000 + Touchpoints across the Globe and they had spent 720 crores in Advertising & Publicity.

Hero has entered Mexico as a new market they have Commenced retail sales in Mexico and introduced an extensive portfolio of products and also relaunched products in Argentina and Nicaragua.

Hero Motocorp has strengthened its presence in the Gulf region, expanding its network of touchpoints, including dealerships, service centers, and spare parts outlets; entered into another exclusive dealership in Dubai.

Hero has reinvigorated strategy for the Nigerian market, leading to a 978% dispatch growth. hero has launched a new motorcycle – ‘Hunter’ developed especially for the market.

The Hunter model has been extensively tested in native conditions while coming to an industry’s first 12-month or 75,000 km engine warranty has been given.

Additionally, they have established outlets across the country through dealers and parts distributors and an extensive network of 5,000+ trained technicians to ensure easy access to services and parts for all customers.

Hero had studied, analyzed the market, and taken action to improve customer service through the dealership

• Domestic Network Expansion: 528
• New Dealers Appointed: 25

Hero has its own Digital platforms and cybernetic assistants are increasingly becoming an essential part of work and daily lives. Hero had investments in the rapid modernization and digitalization of processes show that they are precisely on the right track.

The launch of a virtual showroom, providing customers with an immersive buying experience, is among one the several digital initiatives that have helped us drive process optimization.

Hero MotoCorp has also launched a sales and aftersales services platform on WhatsApp. Going forward, we expect 30% of our sales to be generated from digital channels. Additionally, we have launched 7 new ‘phygital Hero 2.0’ stores across the country.

• 5% Digital Sales Contribution

Hero MotoCorp R&D

Hero has strengthened its portfolio in the premium motorcycle and scooter segment. Hero’s world-class R&D facility Centre of Innovation and Technology (CIT), Jaipur, and Technical Centre Germany (TCG), which is also home to Hero MotoSports — worked in close coordination to design and develop a new range to address the changing market dynamics.

• In this year FY22: R&D Investments was 616 crore
• R&D infrastructure was 6,700 sq. m set-up in India and 69,000+ sq. m state-of-the-art R&D centers in India and Germany
• Team size:
  • Hero Tech Centre in Germany (HTCG): 51
  • Centre of Innovation and Technology in Jaipur (CIT):1,094
• 500+ Cumulative Patents Filed in 6 Years
• India’s First R&D Unit to Receive GREENCO PLATINUM RATING Under CII-RSPCB

Hero MotoCorp R&D primarily focused on the extensive testing of the EV ecosystem, further
increasing BSVI engine performance and adding features in the 110cc segment for an enhanced
experience. Going forward, we will also focus on developing Flexi-fuel and alternate-fuel engines.

Hero MotoCorp Operational in FY22:

• Hero has adopted best-in-class operational practices and multiple cost-control measures.
  • Domestic Sales: 4.64 million
  • Global Business Sales: 0.3 million
  • Domestic market share (Two-wheelers): 34.6%
  • Domestic market share (Motorcycles): 48.3%
  • Highest Ever-monthly Global Business Sales in March 2022 at 34,390 Units
• Energy Consumption:
• Solar footprint increased to 11.2 MW with the potential generation of 12 million units annually
• 1,370 lakh KWh Energy Consumed Including
• 106.66 KWh Renewable Energy
• 17% Reduction in Energy consumption
  • Hero Future plans in Energy to further reduce direct emissions through the enhanced energy efficiency of operations and increased usage of renewable energy and offset mechanisms.
• Water consumption:
  • 8,24,012 KL Water Consumption
  • 10% reduction in water consumption
    • Hero has continued investments in sewage/ effluent treatment plants (STPs) and the creation of new rainwater harvesting (RWH) structures at various locations to improve the groundwater table and also created various RWH structures beyond the fence, as part of community initiatives.
  • 8% Reduction in a waste generation
• they have explored a number of recycling/sustainable disposal options, to be implemented across the organization.

HeroMotocorp Subsidiaries and associated company:

Hero has 6 subsidiaries company and 2 associates company they are

1. Hero Tech Center Germany GmbH (‘HTCG’)
   • HTCG is a wholly owned subsidiary of Hero MotoCorp, incorporated in Germany to undertake research and development and other ancillary activities for the manufacture, testing, validating, etc. of two-wheelers and components/parts thereof.
   • It also undertakes, coordinates, and facilitates two-wheeler rally participation and development activities.
2. HMCL Netherlands B.V. (‘HNBV’)
   1. HNBV is a wholly owned subsidiary of Hero MotoCorp, incorporated in Amsterdam as a private company with limited liability under the laws of The Netherlands with the primary objective of promoting overseas investments.
3. HMCL Colombia S.A.S. (‘HMCLC’)
   • HMCLC was incorporated in Colombia as a joint venture between HNBV and Woven Holdings LLC as a simplified stock corporation company.
     • HNBV currently holds 68% equity in HMCLC
     • 32% equity is held by Woven Holdings LLC.
   • The main business of HMCLC is to manufacture and sell two-wheelers in Colombia. It has a manufacturing facility with a production capacity of 80,000 units per annum.
4. HMCL Niloy Bangladesh Limited (‘HNBL’)
   • HNBL was incorporated in Bangladesh as a joint venture between HNBV and Niloy Motors Limited, Bangladesh as a limited liability company.
     • HNBV currently holds 55% equity in HNBL
     • 45% equity is held by Nitol Niloy Group, Bangladesh.
   • The main business of HNBL is to manufacture and sell two-wheelers. It has a manufacturing facility with a production capacity of 1,50,000 per annum.
5. HMCL Americas Inc. (‘HMCLA’)
   • HMCLA is a wholly owned subsidiary of Hero MotoCorp, incorporated as a Corporation pursuant to the General Corporation Law of the State of Delaware, the United States of America with the primary objective to pursue various global businesses.
6. HMC MM Auto Limited (‘HMCMMA’)
   • Hero has a joint venture with Marelli Europe S.p.A, Italy, namely HMC MM Auto Limited in India, which is set up for the purpose of carrying out manufacturing, assembly, sale, and distribution of two-wheeler fuel injection systems, and parts.

Associate Companies

1. Hero FinCorp Limited (‘HFCL’)
   • HFCL is an associate of Hero Motocorp, incorporated in the year 1991
     • Hero holds 41.19% of the equity share capital of HFCL.
   • HFCL is a non-banking finance company engaged in providing financial services, including two-wheeler financing and providing credit to Company’s vendors and suppliers.
   • they have added several new products and customers to their portfolio, like SME and commercial loans, loans against property, etc.
2. Ather Energy Private Limited (‘AEL’)
   1. AEL is a private limited company, focused on developing, designing, and selling premium electric two-wheelers.
   2. Hero MotoCorp in AEL is 37.65% which is equivalent to 34.04% on a fully diluted basis

HeroMotoCorp Financial Information:

• Number of Motorcycles and Scooters Sold FY22: 49 Lakhs
• Revenue from Operations: ₹ 29,245 crores
• EBITDA: ₹ 3,369 crores
• Profit Before Tax: ₹ 3,250 crores
• Profit After Tax: ₹ 2,473 crores

The key ratio of Hero:

• Debtors Turnover Ratio: 12.13
• Inventory Turnover Ratio: 16.07
• Interest Coverage Ratio: 140.04
• Current Ratio-times: 1.99
• Debt Equity Ratio: 0.01
• Operating Profit Margin: 9.30%
• Net Profit Margin: 8.30%
• Return on Net Worth: 15.96%