Hero MotoCorp was established in 1984 as a joint venture between Hero Cycles of India and Honda Motor of Japan. It introduced its first 100cc motorcycle, the Hero Honda CD-100, the same year. Over the decades, Hero Honda grew to become the largest motorcycle manufacturer in the world by 2011. In 2010, Honda exited the joint venture and the company was renamed Hero MotoCorp. Today it remains the largest motorcycle company in India with a wide range of motorcycles and scooters across segments.

1. Company History - Hero MotoCorp
1983 - Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
1984
- The Company was incorporated on 19th January, at New Delhi. The Company Manufacture
motor cycles up to 100 cc capacity. The Company was promoted by Hero Cycles (P) Ltd.
(HCPL).
- The Company entered into a technical-cum-financial collaboration agreement with Honda
Motor Co. Ltd., Japan (HML). As per this collaboration agreement, HML was to furnish
complete technical information and know-how and trade secrets and other relevant data.
- Hero Honda CD-100 is the first four stroke motorcycle to be introduced in India in 100cc
range. Its most attractive features are fuel efficiency and its light weight. CD-100 will be
equipped with electronic ignition system, illuminated speedometer, 4 speed gear box, neutral
and flasher indicators, etc.
- 15 No. of equity shares subscribed for by the promoters, etc. In November, 119,99,985 No.
of equity shares issued at par of which 71,99,985 shares reserved for allotment as under:
- (i) 31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd., and Bahadur Chand
Investments (P) Ltd.
- (ii) 31, 20,000 shares to Honda Motor Co. Ltd., Japan and
- (iii) 9, 59,987 shares to friends and association of promoters. Out of the balance 48, 00,000
shares, 2, 40,000 shares were reserved for subscription by the employees of the Company and
96,000 shares by business associates. The remaining 44, 64,000 shares were offered at par for
public subscription during November.
1985
- The Company embarked on its 2nd phase of expansion of increasing its installed capacity
from 1, 20,000 to 1, 50,000 vehicles per annum by the addition of several critical aluminium
and steel components.
1986
- 36, 00,000 rights equity shares issued at par in prop. 3:10.
1987

2. - The Company offered 6,00,000 - 15% secured redeemable non-convertible debentures of Rs
100 each for cash at par on rights basis in the proportion 1 debenture: 18 equity shares.
- Another 3, 00,000 - 15% debentures were allotted to retain oversubscription. The debentures
were to be redeemed at a premium of Rs 5 per debenture on the expiry of the 7th year from
the date of allotment of the debentures.
- 3, 75,000 rights equity shares issued at par in prop. 3:10.
1989
- The Company introduced a new model "Sleek" during July.
- 850 No. of equity shares forfeited.
1990
- The Company was planning to launch a new model motor cycle-CD 100 SS suitable to
semi-rural conditions. In the domestic market the Company was reported to have a market
share of 46%.
- 850 forfeited shares reissued.
1994
- The Company proposed to expand the capacity of existing plant at Dharuhera to 2, 40,000
nos. per annum. Another plant with an installed capacity of 1, 50,000 nos. per annum at
Gurgaon Industrial Estate was being set up.
- The Company issued 39, 79,500 bonus shares to the existing shareholders in the ratio of 1:4.
The Company also issued 28,557 number of fractional coupons representing 14,250 shares
against which shares shall be allotted to presenting the same for consolidation and allotment.
- The Company's production and turnover increased to 1, 83,490 motorcycles and Rs.483.85
crores respectively due to growth in demand for two wheelers and declining inflation.
1995
- 14,420 bonus shares issued by way of consolidation of fractional coupons. - A new
Technical Collaboration Agreement has been signed with Honda Motor Co. Ltd., Japan for
the period up to the year 2004 which includes technology related to models of higher Engine
displacement.
- The Company allotted 39,79,500 No. of Equity Shares of Rs. 10/- each as Bonus shares on
7th February, by way of capitalisation of General Reserves.

3. - The Company had issued 28557 No. of Fractional Coupons representing 14.250 shares
against which the Shares shall be allotted on presenting the same for consolidation and
allotment.
1997
- Hero Honda Motors has launched its newest motorcycle, the Street, a 100 cc bike designed
for use in congested urban traffic conditions.
- Hero Honda Motors Ltd (HHML) has set up a new motorcycle plant in Gurgaon, near Delhi
for the manufacture of the Honda Super Cub 100 cc Steptoe bike.
- Hero Honda has set up a new state-of-the-art plant, heralding a new phase of development
of motorcycle industry in India, to provide the most modern and technologically advanced
production facilities.
- Hero Motors of the Rs.1, 600 crore Hero group, as part of its globalisation plan, has set up a
plant in Brazil for manufacturing hero winner scooters.
- A new step thru model `Street-100' with unique feature was launched on 24th January.
1998
- The company proposes to increase the share capital to 5 crore equity shares of Rs. 10 each,
4 lakh cumulative redeemable preference shares of Rs. 100 each and 4 lakh cumulative
convertible preference shares of Rs. 100 each with power to increase or reduce it from time to
time.
- The company further proposes to capitalise Rs. 19, 96, 87,500 from general reserve to share
capital through issue and allotment of bonus shares. Altogether, 1,99,68,750 fully paid bonus
shares will be allotted and distributed to members of the company holding equity shares of
the company in the proportion of one bonus share for every fully paid equity shares of Rs.10
each.
- Motorcycles major Hero Honda is considering entry into scooters in collaboration with
partners, Honda Motors, after the Japanese company decided to walk out of Kinetic Honda,
their scooter venture with the Firodias of Pune.
- Honda Motors recently pulled out of its joint venture with the Firodias in which it held a 51
per cent equity stake.
- Honda Motor Company Ltd of Japan (Honda) and Kinetic Honda Motor Ltd (KHML) have
signed a five-year licence and technical assistance agreement under which KHML will
continue to receive the technical knowhow, critical vehicle parts and access to Honda's
markets even after the sale of Honda stake in KHML to Kinetic Engineering Ltd (KEL).

4. - The Company changed the paradigm in two-wheelers by launching the most powerful and
fast bike- CBZ(ee) with a unique feature of Transient Power Fuel Control (TPEC) system.
- 23,962,500 bonus shares issued in prop. 1:1.
1999
- Hero Honda Motors Ltd (HHML) and 20th Century Finance Corporation Ltd have signed a
Memorandum of Understanding (MoU) for financing of Hero Honda motorcycles.
- The company, a joint venture between Honda Motor Company of Japan and Hero group of
India to produce four-stroke motorcycles, also aims to increase its share by 1 per cent to 38.6
per cent during the current fiscal.
- Leading two-wheelers manufacturer Hero Motors has formed a joint venture with Briggs
Stratton of US to develop and manufacture four-stroke engines for mopeds and scooters in
India, a top company.
- Honda Motor Company of Japan has decided to re-enter the scooter market in India as also
foray into three-wheelers in a joint initiative with its existing joint venture company Hero
Honda Motors Ltd.
2000
- Hero Honda Motors Ltd. and Tata Finance Ltd. have signed a national tie-up agreement.
The Company is the largest manufacturer of motorcycles in the country.
- The Company will relaunch its stepthru Stree Smart on Baisakhi 13th April.
- Hero Honda Motors Ltd (HHML), has launched an upgraded version of the existing step-
through motorcycle - the Hero Honda Street.
- The Company was ranked as the 9th Highest Value Creator among 12 industry groups
within the Bombay Stock Exchange top 100 companies over a five year period (1994-99).
2001
- Hero Honda Motors Ltd. has launched a new 100cc motorcycle named `Passion'.
- The Company has secured shareholders' approval for splitting one equity share of Rs 10
each into five equity shares of Rs 2 each in the ratio of 1:5.
- Hero Honda Motors Ltd. has become the largest seller of motorcycles amongst all Honda
companies and ventures in the world by selling one million motorcycles during the current
financial year.

5. - Credit rating Agency Crisil has reaffirmed outstanding `AAA' rating assigned to the
proposed Rs 15 crore non-convertible debenture issue, Rs 16 crore commercial paper
programme and fixed deposit programme of Hero Honda Motors.
- Promoter-Chairman of the country’s largest motorcycle manufacturing company, Hero
Honda Ltd, Brijmohan Lall Munjal has bagged the prestigious Ernst & Young Entrepreneur
of the Year (EOY) award here on September 27.
2002
-Company included in the 30 companies Bombay Stock Exchange index (Sensex)
-Becomes the world's largest two wheeler company by selling 1.3 million vehicles in 2001
-Japanese automaker Honda Motor for the first time decides to source motorcycles from its
Indian joint venture Hero Honda to sell as 'Honda' brandname in Vietnam
-Royalty to the Japanese parent, Honda Motor Co, hiked to Rs 630 per vehicle as compared
to the flat royalty of Rs 200 on existing models like Splendour and Passion.
-Approves Foreign Institutional Investors (FIIs) to increase their stake from the present 24
per cent to 40 per cent
-Comes out as the most profitable two-wheeler company in the country during the trailing
four quarters by overtaking second-largest player, Bajaj Auto
-Launches Ambition, a 133 cc 11 BHP vehicle
-Unveils Smart, a 75 cc step-thru
-Comes out with a free insurance scheme worth Rs 1,000 for all its bikes
-Bajaj Auto goes ahead of Hero Honda in market capitalisation (m-cap) growth in the last
fifteen months
2003
-Achieves a landmark sales turnover of over Rs 5,000 crore during 2002-03
-Launches its cheapest 100cc motorbike 'CD Dawn'
-Hikes production capacity at two of its manufacturing facilities to three lakh units
-Hero Honda and SBI Cards launch co-branded credit card for Hero Honda's customers
-Achieves milestone by producing five million bikes from its Dharuhera plant in Haryana

6. -Launches its new 223-cc, 16.8 BHP Karizma at Rs 79,000
-Joins hands with Small Industries Service Institute (SISI) to train the unemployed youth who
have finished diplomas
-Initiates a new dealer credit system which will bring down its receivable levels to around
seven days and save the company Rs 100 crore
-Introduces Passion Plus, new version of Passion motorcycle
-Forges marketing pact with Aprilia, the Italian bike maker, to introduce its range of Moto
scooters and top-end motorcycles in India
-The company has bagged two Total Customer Satisfaction (TCS) Awards.
-Hero Honda Karizma bags BBC Bike of the Yr Award
2004
-Hero Honda retreats Ambition
-Hero Honda unveils new version of Ambition
-Hero Honda's Dawn emerges as largest entry-level bike
-Hero Motors introduces 'Sting' new 4-stroke bike
-Hero Motors has announced a licensing agreement with Austria-based Bombardier-Rotax
that will provide 125cc-175cc engines for the upcoming `Hero Aprilia' range of scooters.
-Hero Honda renews alliance with Honda Motor
-Two-wheeler major Hero Honda and SBI Card, the credit card arm of State Bank of India,
have joined hands to launch India's first co-branded credit card in the two-wheeler industry
2005
-New product launches widen HHML's product portfolio
-Two-wheeler major Hero Honda on October 5 announced launch of its first scooter 'Pleasure'
-Hero Honda rolls out 150-cc motorcycle Achiever

7. 2006
-Hero Honda launches CBZ variant X-treme
-Hero Honda announced the launch of two new variants the new 'Glamour' and 'Passion Plus'
limited edition. - Hero Honda is the World No. 1 for the 5th year in a row
- 15 million production milestone achieved
2007
-Hero Honda Motors Ltd. has appointed Mr. Yutaka Kudo as Director and Whole-time
Director of the Company in the category of Executive Director w.e.f. April 1, 2007.
- Hero Honda is the World No. 1 for the 6th year in a row
- New 'Splendor NXG' launched
- New 'CD Deluxe' launched
- New 'Passion Plus' launched
- New motorcycle model 'Hunk' launched
- 20 million production milestone achieved
2008
- Hero Honda Motors Ltd has informed that Mr. Arun Nath Maira. Has been appointed as an
Additional Director in the category of Non-Executive and Independent Director w.e.f.
December 20, 2008 by the Board of Directors by way of passing a resolution by circulation.
- Hero Honda Haridwar Plant inauguration
- New 'Pleasure' launched
- Splendor NXG launched with power start feature
- New motorcycle model 'Passion Pro' launched
- New 'CBZ Xtreme' launched
- 25 million production milestone achieved
- CD Deluxe launched with power start feature

8. - New 'Glamour' launched
- New 'Glamour Fi' launched
2009
- Hero Honda Motors Ltd has appointed Mr Ravi Nath as an Additional Director in the
category of Non-Executive and Independent Director w.e.f. October 14, 2009 by the Board of
Directors by way of Passing a resolution by circulation on October 14, 2009.
- Hunk' (Limited Edition) launched
- Splendor completed 11 million production landmark
- New motorcycle model 'Karizma - ZMR' launched
- Silver jubilee celebrations
Registered & Corporate Office
34, Community Centre,
Basant Lok,
Vasant Vihar
City:New Delhi
State:Delhi
Pincode:110057
Email ID:ilam.kamboj@heromotocorp.com
Web Url:http://www.heromotocorp.com
Factory/plant
Dharuhera Plant,
69 KM Stone,
Delhi-Jaipur Highway,
City:Rewari District
State:Haryana
Pincode:122100
Gurgaon Plant,
37 KM Stone,
Delhi-Jaipur Highway,

9. City:Gurgaon
State:Haryana
Pincode:122001
Haridwar Plant:
Plot No. 3, Sector - 10,
Ranipur, I.I.E., SIDCUL,
City:Haridwar
State:Uttaranchal
Pincode:249403

10. Parent Company Hero Group
Category Motorcycles, Scooters
Sector Two-Wheelers
Tagline/ Slogan Hum mei hai Hero; Desh ki Dhadkan (HeroHonda)
Wide product variety, excellent brand equity & high customer
USP loyalty
STP
Segment Young boys looking for fast sporty bikes for Indian roads
Target Group Young boys in the age 18-30 middle class
Positioning Every person has a hero and a winner within one’s self
Product Portfolio
1. CBZ 2. Karizma
3. Passion 4. Pleasure
Brands 5. Splendor 6. Impulse
SWOT Analysis
1. Huge brand equity and one of the biggest players in the two
wheelers Indian market
2. Excellent R&D, and wide variety of products in every segment.
3. Excellent distribution, over 3000 dealerships and service
centres.
4. Good advertising and excellent rebranding from Hero Honda to
Strength Hero Moto Corp.
1. Absence in the premium bike segment.
2.High imports for its spare parts i.e. over 30% imports.
3. Most of the products have similar features and low on design
Weakness and innovation.
1.Two-wheeler segment is one of the most growing industries.
Opportunity 2.Export of bikes is limited i.e. untapped international markets.
1. Strong competition from Indian as well as international brands
2. Dependence on government policies and rising fuel prices
Threats 3. Better public transport will affect two-wheeler sales

11. Competition
1. Yamaha
2. Bajaj Auto
3.TVS
4.Suzuki
5. Harley Davidson
6. Royal Enfield
Competitors 7. Ducati

12. Hero MotoCorp formerly Hero Honda is a motorcycle and scooter manufacturer
based in India. Hero Honda started in 1984 as a joint venture between Hero Cycles of
India and Honda of Japan. The company is the largest two wheeler manufacturer in
India. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors
ranked at 108.
“Hero” is the brand name used by the Munjal brothers for their flagship company
Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor
Company was established in 1984 as the Hero Honda Motors Limited At Dharuhera
India. Hero MotoCorp has three manufacturing facilities based at Dharuhera,
Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are
capable of churning out 3 million bikes per year.
1956 -Formation of Hero Cycles in Ludhiana(majestic auto limited) 1983-Joint
Collaboration Agreement with Honda Motor Co. Ltd. Japan Shareholders Agreement
signed. 1985- CD 100 launched. 1994 -Splendor launched. 1999 -CBZ
launched. 2003 -Karizma launched. August 2011 -Hero and Honda part company,
thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint venture.
In December 2010, the Board of Directors of the Hero Honda Group have decided to
terminate the joint venture between Hero Group and Honda in a phased manner. The
Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the
joint venture Hero Group could not export to international markets (except Sri Lanka)
and the termination would mean that Hero Group can now export. Since the
beginning, the Hero Group relied on their Japanese partner Honda for the technology
in their bikes. So there are concerns that the Hero Group might not be able to sustain
the performance of the Joint Venture alone
During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12%
over last year. In the same year, the company had a market share of 57% in the Indian
market. Hero Hondas bike Hero Honda Splendor sells more than one million units
per year. The company sold record 6,117,599 units of two-wheelers in the period
January-December 2011, a growth of 19.2% over the calendar year of 2010 when it
had sold 5,134,549 two- wheelers.
The demand of hero motocorp products are increasing day by day. Demand is more
then the production capacity. There is a waiting period of over 2-3 months for
selected bikes. Even though the termination of the venture with Hero Motocorp
there is absolutely no change in demand.
The company has a stated aim of achieving revenues of $10 billion and volumes of 10
million two- wheelers by 2016-17. This in conjunction with new countries where
they can now market their two-wheelers following the disengagement from Honda,
Hero MotoCorp hopes to achieve 10 per cent of their revenues from international
markets. to cope with the new demand the company was going to build their fourth
factory in South India and their fifth factory in Western India.

13. COMPOSITION OF REVENUE IN 2011-12
` ` in crores %
1 MATERIALS 17,281.57 67.51
2 OPERATIONS AND OTHER EXPENSES 1,943.16 7.59
3 TAXES AND DUTIES 2,142.57 8.37
4 EMPLOYEES 735.52 2.87
5 INTEREST 21.30 0.08
6 DEPRECIATION 1,097.34 4.29
7 SHAREHOLDERS AND RESERVES & SURPLUS
2,378.139.29
TOTAL 25,599.59 100.00
COMPOSITION OF REVENUE IN 2011-12
` in crores %
1 MATERIALS17,281.57 67.51
2 OPERATIONS AND OTHER EXPENSES 1,943.16 7.59
3 TAXES AND DUTIES 2,142.57 8.37
4 EMPLOYEES 735.522.87
5 INTEREST 21.30 0.08
6 DEPRECIATION 1,097.34 4.29
7 SHAREHOLDERS AND RESERVES & SURPLUS
2,378.139.29
TOTAL 25,599.59 100.00

14. SLEW OF LAUNCHES
Launched three new models, including variants of existing models successfully.
Launched ‘Impulse’ (150cc), India’s only dual-purpose on-road-off-road bike; launched the
Company’s first motorcycle under the ‘Hero’ brand name.
Launched a new 110cc scooter ‘Maestro’, strengthening a steadily growing presence in the
gearless scooter segment.
Launched a thrilling new 125cc ‘Ignitor’ bike. Showcased a concept Hybrid scooter – ‘Leap’,
unveiled an all-new 110cc Passion X Pro during the Auto Expo in Delhi.
UNMATCHED PERFORMANCE
In its first full year of operations under its new avatar, Hero’s two-wheeler sales grew 15% from 5.4
million in 2010-11 to 6.23 million in 2011-12. Recorded over 0.65 million unit retail sales of two-
wheelers in October 2011, the highest-ever in a month. Surpassed the previous record of over 0.60
million sales in October 2008.
VISIBILITY
Sponsored the men’s and women’s hockey qualifying events for the London Olympics 2012; the
event, titled ‘Hero FIH Road to London’ and held in Delhi, witnessed the Indian men’s hockey team
qualifying for the London Olympics.
Celebrated young achievers as Brand Ambassadors; Hero roped in popular Bollywood star Ranbir
Kapoor.
ROBUST STRATEGY
Hero MotoCorp’s key strategies focus on building a steady and robust product portfolio across
categories, explore growth opportunities globally, continuously improve its operational efficiency,
aggressively expand its reach to customers, invest in brand-building activities and ensure customer
and shareholder delight.
STATE-OF-THE-ART FACILITIES
Two manufacturing plants are based at Gurgaon and Dharuhera in Haryana (India)
One manufacturing plant is located at Haridwar, Uttarakhand (India)
BENCHMARKED CERTIFICATIONS
Environmental Management Systems as per ISO 14001
Occupational Health and Safety Management Systems as per OHSAS 18001
Quality Management Systems as per ISO 9001

15. INCREASING PROXIMITY
Pan-India footprint with 5,100+ customer touch-points
100,000+ villages covered through extensive rural India presence
Global footprint across several nations
ROADMAP FOR FUTURE GROWTH
INVESTMENT ` crores OPERATIONAL
Approximately Approximately
4th plant at Neemrana, Rajasthan 400 First quarter, FY2014
5th plant in Gujarat 1,100 Second quarter, FY2014
Integrated R&D Centre at Kukas, Rajasthan 400 Second quarter, FY2014
Capacity expansion at existing plants 500
Other investments 175
4,570
GLOBALLY PREFERRED Exports grew 24% during the year under review, as we exported 164,570 two-
wheelers.
CORPORATE OVERVIEW
STATUTORY REPORTS
FINANCIAL STATEMENTS

16. 19 ANNUAL REPORT 2011-12
We are sprucing up our sales network in the export markets. All exports to international markets will
be made under the brand name ‘Hero’.
More emphasis is being laid on existing export markets:
Sri Lanka: An aggressive sales campaign was carried out, which helped us double sales in the
scooter segment.
Bangladesh: Mileage contests and exchange melas were held to increase brand resilience and
visibility.
TRANSCONTINENTAL PRESENCEAs we plan to enter Central & Latin America and Africa, marketing
and brand-building exercises will commence shortly in select markets across these locations. A new
International Business Organisation structure is currently being implemented to drive this initiative
and growth.
Several countries have been identified in Africa, Latin and Central America as potential international
markets. Clearly, our focus will continue to be on markets, where volumes are large and products can
be exported with no/ minimum changes.
We remain fully committed to emerge as a market leader and manufacturer of two-wheelers with
futuristic technology. Our R&D team comprises 200 technically qualified experts, along with state-of-
the- art infrastructure.
We entered into a strategic partnership with Eric Buell Racing (EBR) of USA. Through this
partnership, we plan to receive support in terms of cutting-edge technology and design to develop
future models. This alliance is in line with our objective of further developing in-house R&D
capabilities by leveraging strategic international alliances.
We forged an alliance with AVL, Austria, a global leader in engine design and development, to
develop different categories of engines. We sent our engineers to AVL to enable them to learn and
execute engine development projects independently in the future.
During 2011-12, we took several initiatives to strengthen our R&D capabilities. Several R&D
engineers specialising in the field of designing, simulation, Finite Element Analysis (FEA), Computer-
aided Engineering (CAE), prototyping, component testing and vehicle testing, among others, have
been inducted to further strengthen the R&D team.

17. SALES
NOS. 1,677,537 2,070,147 2,621,400 3,000,751 3,336,756 3,337,142 3,722,000 4,600,130 5,402,444
6,235,205
GROWTH (%) 17.7 23.4 26.6 14.5 11.2 0.01 11.5 23.6 17.4 15.4
5-YEAR CAGR (%) 18.5 14.7 12.4 11.9 12.5 13.3
TOTAL INCOME
(` crores) 5,195 5,997 7,559 8,870 10,090 10,517 12,565 16,099 19,688 23,944
GROWTH (%) 14.4 15.5 26.0 17.4 13.7 4.2 19.5 28.1 22.3 21.6
5-YEAR CAGR (%) 17.3 15.2 15.9 16.3 17.3 18.9
NET SALES
(` crores) 5,102 5,832 7,422 8,714 9,900 10,332 12,319 15,758 19,245 23,368
GROWTH (%) 14.2 14.3 27.2 17.4 13.6 4.4 19.2 27.9 22.1 21.4
5-YEAR CAGR (%) 17.3 15.2 16.1 16.3 17.2 18.7
PROFIT BEFORE TAX
(` crores) 885 1,072 1,217 1,412 1,246 1,410 1,781 2,832 2,405 2,865
GROWTH (%) 27.4 21.2 13.5 16.0 -11.8 13.2 26.3 59.0 -15.1 19.1
5-YEAR CAGR (%) 12.4 9.8 10.7 18.4 11.2 18.1
PROFIT AFTER TAX
(` crores) 581 728 810 971 858 968 1,282 2,232 1,928 2,378
GROWTH (%) 25.5 25.4 11.3 19.8 -11.7 12.8 32.4 74.1 -13.6 23.4
5-YEAR CAGR (%) 13.1 10.8 12.0 22.5 14.7 22.6
OPERASALES
NOS. 1,677,537 2,070,147 2,621,400 3,000,751 3,336,756 3,337,142 3,722,000 4,600,130 5,402,444
6,235,205
GROWTH (%) 17.7 23.4 26.6 14.5 11.2 0.01 11.5 23.6 17.4 15.4
5-YEAR CAGR (%) 18.5 14.7 12.4 11.9 12.5 13.3
TOTAL INCOME
(` crores) 5,195 5,997 7,559 8,870 10,090 10,517 12,565 16,099 19,688 23,944
GROWTH (%) 14.4 15.5 26.0 17.4 13.7 4.2 19.5 28.1 22.3 21.6
5-YEAR CAGR (%) 17.3 15.2 15.9 16.3 17.3 18.9
NET SALES

18. (` crores) 5,102 5,832 7,422 8,714 9,900 10,332 12,319 15,758 19,245 23,368
GROWTH (%) 14.2 14.3 27.2 17.4 13.6 4.4 19.2 27.9 22.1 21.4
5-YEAR CAGR (%) 17.3 15.2 16.1 16.3 17.2 18.7
PROFIT BEFORE TAX
(` crores) 885 1,072 1,217 1,412 1,246 1,410 1,781 2,832 2,405 2,865
GROWTH (%) 27.4 21.2 13.5 16.0 -11.8 13.2 26.3 59.0 -15.1 19.1
5-YEAR CAGR (%) 12.4 9.8 10.7 18.4 11.2 18.1
PROFIT AFTER TAX
(` crores) 581 728 810 971 858 968 1,282 2,232 1,928 2,378
GROWTH (%) 25.5 25.4 11.3 19.8 -11.7 12.8 32.4 74.1 -13.6 23.4
5-YEAR CAGR (%) 13.1 10.8 12.0 22.5 14.7 22.6
OPERATING MARGIN
(%) 15.5 15.6 14.6 14.6 10.8 11.8 12.7 16.2 11.4 10.7
OPBDIT MARGIN
(%) 16.7 16.8 15.7 16.0 12.2 13.3 14.1 17.4 13.5 15.3
EARNINGS PER SHARE
(`) 29.1 36.5 40.6 48.6 43.0 48.5 64.2 111.8 96.5 119.1
DIVIDEND PER SHARE
(`) 18 20 20 20 17 19 20 110 105 45
DIVIDEND
(%) 900 1,000 1,000 1,000 850 950 1,000 5,500 5,250 2,250 TING MARGIN
(%) 15.5 15.6 14.6 14.6 10.8 11.8 12.7 16.2 11.4 10.7
OPBDIT MARGIN
(%) 16.7 16.8 15.7 16.0 12.2 13.3 14.1 17.4 13.5 15.3
EARNINGS PER SHARE
(`) 29.1 36.5 40.6 48.6 43.0 48.5 64.2 111.8 96.5 119.1
DIVIDEND PER SHARE
(`) 18 20 20 20 17 19 20 110 105 45
DIVIDEND
(%) 900 1,000 1,000 1,000 850 950 1,000 5,500 5,250 2,250

19. lance Sheet of Hero Motocorp
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
ces Of Funds
Share Capital 39.94 39.94 39.94 39.94 39.94
ty Share Capital 39.94 39.94 39.94 39.94 39.94
e Application Money 0.00 0.00 0.00 0.00 0.00
rence Share Capital 0.00 0.00 0.00 0.00 0.00
rves 4,249.89 2,916.12 3,425.08 3,760.81 2,946.30
luation Reserves 0.00 0.00 0.00 0.00 0.00
worth 4,289.83 2,956.06 3,465.02 3,800.75 2,986.24
red Loans 994.85 1,458.45 0.00 0.00 0.00
cured Loans 0.00 32.71 66.03 78.49 132.00
Debt 994.85 1,491.16 66.03 78.49 132.00
Liabilities 5,284.68 4,447.22 3,531.05 3,879.24 3,118.24
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
ication Of Funds
s Block 6,308.26 5,538.46 2,750.98 2,516.27 1,938.78
-------------
Accum. Depreciation 2,522.75 1,458.18 1,092.20 942.56 782.52
in Rs. Cr.
Block 3,785.51 4,080.28 1,658.78 1,573.71 1,156.26 -----------
tal Work in Progress 193.95 125.14 48.14 120.54 408.49
stments 3,964.26 5,128.75 3,925.71 3,368.75 2,566.82
ntories 675.57 524.93 436.40 326.83 317.10
ry Debtors 272.31 130.59 108.39 149.94 297.44
and Bank Balance 56.10 47.75 1,863.48 217.49 130.58
Current Assets 1,003.98 703.27 2,408.27 694.26 745.12
s and Advances 926.99 783.48 438.46 325.80 196.37
d Deposits 20.72 23.77 43.73 2.08 0.51
CA, Loans & Advances 1,951.69 1,510.52 2,890.46 1,022.14 942.00
ered Credit 0.00 0.00 0.00 0.00 0.00
ent Liabilities 3,520.66 5,316.40 3,965.69 1,678.93 1,455.57
isions 1,090.07 1,081.07 1,026.35 526.97 499.76
CL & Provisions 4,610.73 6,397.47 4,992.04 2,205.90 1,955.33
-
Current Assets -4,886.95 -2,101.58 -1,183.76 -1,013.33
2,659.04
ellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Assets 5,284.68 4,447.22 3,531.05 3,879.24 3,118.24
ingent Liabilities 252.62 131.90 73.04 100.54 56.37
k Value (Rs) 214.83 148.03 173.52 190.33 149.55
ce : Dion Global Solutions Limited

20. Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover
Bajaj Auto 2,080.00 60,188.34 19,528.98 3,004.05 6,138.55
Hero Motocorp 1,764.90 35,242.85 23,579.03 2,378.13 5,284.68
TVS Motor 43.05 2,045.25 7,126.20 249.07 1,884.76
Mah Scooters 517.50 591.43 6.68 -6.49 202.50
LML 7.25 59.44 311.49 -45.20 -358.24
Kinetic Motor 10.45 28.79 5.67 1.48 58.54
Competition
Balance Sheet ------------------- in Rs. Cr. -------------------
Hero
Bajaj Auto TVS Motor Mah Scooters Atul Auto
Motocorp
Mar '12 Mar '12 Mar '12 Mar '12 Mar '12
Sources Of Funds
Total Share Capital 39.94 289.37 47.51 11.43 7.55
Equity Share Capital 39.94 289.37 47.51 11.43 7.55
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 4,249.89 5,751.70 1,121.79 191.07 48.54
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 4,289.83 6,041.07 1,169.30 202.50 56.09
Secured Loans 994.85 0.00 356.70 0.00 3.89
Unsecured Loans 0.00 97.48 358.76 0.00 0.00
Total Debt 994.85 97.48 715.46 0.00 3.89
Total Liabilities 5,284.68 1,884.76 202.50 59.98
Hero
Bajaj Auto TVS Motor Mah Scooters Atul Auto
Motocorp

21. Mar '12 Mar '12 Mar '12 Mar '12 Mar '12
Application Of Funds
Gross Block 6,308.26 3,425.94 2,142.43 26.73 59.99
Less: Accum. Depreciation 2,522.75 1,914.33 1,116.86 19.52 20.02
Net Block 3,785.51 1,511.61 1,025.57 7.21 39.97
Capital Work in Progress 193.95 343.15 52.51 0.00 1.57
Investments 3,964.26 4,882.81 930.92 205.60 7.75
Inventories 675.57 678.53 584.56 0.27 29.82
Sundry Debtors 272.31 423.20 234.07 1.59 6.08
Cash and Bank Balance 56.10 446.49 13.03 2.42 4.74
Total Current Assets 1,003.98 1,548.22 831.66 4.28 40.64
Loans and Advances 926.99 1,744.82 299.84 17.63 6.65
Fixed Deposits 20.72 1,208.36 0.00 5.00 0.05
Total CA, Loans & Advances 1,951.69 4,501.40 1,131.50 26.91 47.34
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 3,520.66 2,925.53 1,149.47 35.29 28.51
Provisions 1,090.07 2,174.89 106.27 1.93 8.14
Total CL & Provisions 4,610.73 5,100.42 1,255.74 37.22 36.65
Net Current Assets -2,659.04 -599.02 -124.24 -10.31 10.69
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 5,284.68 6,138.55 1,884.76 202.50 59.98
Contingent Liabilities 252.62 1,445.67 212.51 4.09 21.09
Book Value (Rs) 214.83 208.77 24.61 177.19 76.68
Source : Dion Global Solutions Limited

23. Key Financial Ratios of
Hero Motocorp
Mar '12 Mar '11 Mar '10 Mar '09
Investment Valuation Ratios
Face Value 2.00 2.00 2.00 2.00
Dividend Per Share 45.00 105.00 110.00 20.00
Operating Profit Per Share (Rs) 182.69 130.06 137.40 87.79
Net Operating Profit Per Share (Rs) 1,181.19 969.86 793.22 617.23
Free Reserves Per Share (Rs) 212.83 146.03 171.52 188.33
Bonus in Equity Capital 59.98 59.98 59.98 59.98

24. Key Financial Ratios of

25. Hero Motocorp
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Investment Valuation Ratios
Face Value 2.00 2.00 2.00 2.00 2.00
Dividend Per Share 45.00 105.00 110.00 20.00 19.00
Operating Profit Per Share (Rs) 182.69 130.06 137.40 87.79 68.50
Net Operating Profit Per Share (Rs) 1,181.19 969.86 793.22 617.23 518.06
Free Reserves Per Share (Rs) 212.83 146.03 171.52 188.33 147.55
Bonus in Equity Capital 59.98 59.98 59.98 59.98 59.98
The two industry leaders in the two-wheelers segment, Bajaj Auto and Hero MotoCorp, seem
geared up to log a good performance in the coming times. Both the companies make a good
option for your portfolio, say Vidrum Mehta and Shrikant Akolkar.
The auto sector is not going through a very good time presently. From inventory pile-ups to
slower demand due to higher interest rates and labour unrests, nothing seems to be going the
right way for this sector. With the economy in a lower gear, these companies are finding it difficult
to step up their speed of growth. Many companies in the sector have started resorting to
production cuts due to the slowing demand. This has led the apex industry body, Society of
Indian Automobile Manufacturers (SIAM), to cut the sales growth guidance for the sector from
the lower double digits to single digits in the current fiscal. Petrol price hikes and talks of
deregulating diesel prices have acted as further speed breakers for the growth of the sector. A
weaker monsoon may worsen the situation even more. Amid all these negatives, what is the
outlook for the sector? Is there any company whose stock can be bought with better returns in
mind? Or should one just wait it out for some time with regard to this sector?
Broadly speaking, the auto industry is divided into the two- and four-wheeler segments. SIAM
has brought down the growth guidance for the four-wheeler segment, but has retained the earlier
projected growth of around 11 to 13 per cent for the two-wheelers segment. Further, according to
SIAM reports, as at the end of FY11, the domestic two-wheeler market accounts for 76 per cent
of the total number of vehicles that are sold. Within the twowheelers segment, two companies,
viz. Hero MotoCorp (HMCL) and Bajaj Auto (BAL), have a total of around 65 per cent of the
market share between themselves. In the motorcycles segment, both these companies have a
combined share of around 80 per cent. Since these two companies form the mainstay of the
domestic two-wheeler market, we have analysed both of them on various parameters that will
help our readers to decide on which of them should ideally form a part of their portfolio.

26. Business & Past Performance
One interesting fact that investors should take note of is that HMCL and BAL collectively have
2.99 per cent weight in the Sensex. At Rs 45189 crore, the market cap of BAL is higher than that
of HMCL, which stands at Rs 40569 crore.
HMCL’s past performance in terms of volumes and revenues has been better than that of BAL.
HMCL’s volumes have grown at a CAGR of 13 per cent over the past five years, outpacing the
industry average of 11 per cent during the same period. BAL’s volumes, on the other hand, have
gone up at a CAGR of 10 per cent over the same period. On the revenue front, HMCL has seen
its income grow at a CAGR of 22 per cent over the past five years, while BAL’s revenues have
grown at a CAGR of 19 per cent over the same period. In terms of volumes and revenues, HMCL
has done better than BAL in the past.
While HMCL and BAL are bothin the two-wheelers business, BAL also makes commercial
vehicles (CV) like goods carriers and passenger vehicles. The CV segment forms about nine per
cent of the total volumes. BAL also derives 35 per cent of the total revenues from exports, while
those in case of HMCL are less than five per cent.
A comparison between these companies is possible on the fact that BAL derives 91 per cent
revenues from two wheelers, while HMCL is entirely a two-wheeler company. Besides, both the
companies derive a major chunk of their revenues from the rural segment, where there is a
strong demand.
Bajaj Auto ( Five Year Summary)
Particulars 2008 2009 2010 2011 2012
Total Sales (Units) 2,451,000 2,195,000 2,853,000 3,824,000 4,349,000
Net Sales (Rs/Cr) 8665.92 8446.03 11543.16 15927.4 18945.52
EBITDA Margin (%) 14.3 13.6 21.7 20.4 20.2
Net Profit (Rs/Cr) 749.56 535.79 1597.22 3454.89 3045.4
Hero MotoCorp ( Five Year Summary)
Particulars 2008 2009 2010 2011 2012
Total Sales (Units) 3,337,142 3,722,000 4,600,130 5,402,444 6,235,205
Net Sales (Rs/Cr) 10331.8 12319.12 15758.1 19245.03 23668.05

27. Hero MotoCorp ( Five Year Summary)
Particulars 2008 2009 2010 2011 2012
EBITDA Margin (%) 13.33 14.13 17.45 13.47 15.35
Net Profit (Rs/Cr) 968 1282 2232 1928 2378
Hero Motocorp Karizma ZMR
Price : Rs. 1,03,000
Mileage : 35-45 kmpl

28. Hero Motocorp HF CD Dawn
Price : Rs. 38,000
Mileage : 70-80 kmpl
Hero Motocorp Pleasure
Price : Rs. 42,500
Mileage : 40-45 kmpl
Hero Motocorp Splendor NXG
Price : Rs. 43,000
Mileage : 75 kmpl
Hero Motocorp HF Deluxe
Price : Rs. 44,000
Mileage : 70-80 kmpl

29. Hero Motocorp Splendor Plus
Price : Rs. 44,500
Mileage : 65-70 kmpl
Hero Motocorp Passion Plus
Price : Rs. 45,000
Mileage : 65-70 kmpl
Hero Motocorp Splendor Pro
Price : Rs. 45000-48100
Mileage : 60-65 kmpl
Hero Motocorp Passion Pro
Price : Rs. 49,000
Mileage : 65-70 kmpl

30. Hero Motocorp Maestro
Price : Rs. 50,000
Mileage : 40-45 kmpl
Hero Motocorp Passion xPro
Price : Rs. 51,500
Mileage : 55-60 kmpl
Hero Motocorp Super Splendor
Price : Rs. 51800
Mileage : 65-70 kmpl
Hero Motocorp Glamour
Price : Rs. 54,500
Mileage : 50-55 kmpl

31. Hero Motocorp Ignitor
Price : Rs. 57,200
Mileage : 55-60 kmpl
Hero Motocorp Achiever
Price : Rs. 58,000
Mileage : 50-55 kmpl
Hero Motocorp Impulse
Price : Rs. 69,500
Mileage : 45-50 kmpl
Hero Motocorp Hunk
Price : Rs. 71,200
Mileage : 45-50 kmpl

32. Hero Motocorp CBZ Xtreme
Price : Rs. 72,300
Mileage : 50-55 kmpl
Company Current Price Book Value P/E Ratio Market Cap
(Rs. Cr.)
Bajaj Auto Ltd. 2,080.00 208.77 20.04 60,188.34
Maharashtra Scooters Ltd. 517.50 177.19 0.00 591.43
Atul Auto Ltd. 183.60 39.51 13.34 207.93
Kinetic Engineering Ltd. 98.00 26.52 0.00 101.65
Majestic Auto Ltd. 49.50 76.75 2.69 51.47
TVS Motor Company Ltd. 43.05 24.61 8.21 2,045.25
Scooters India Ltd. 32.55 -18.25 0.00 139.94
Kinetic Motor Company Ltd. 10.45 -15.78 19.43 28.79
LML Ltd. 7.25 -58.42 0.00 59.44
VCCL Ltd. 3.35 -28.81 0.00 1.61