Hero MotoCorp has registered a net profit growth of 43 per cent at Rs 613 crore for the reporting quarter on the back of better growth in income from operations, the country’s biggest two-wheeler maker said on Thursday.
The Delhi-based company (formerly Hero Honda Motors), had last year posted a Rs 429-crore net profit during the same quarter. That was when it had set aside a sum of Rs 80 crore in lieu of probable claims arising out of litigation, which was not there this year.
The net profit was largely in line with market analysts tracking the company who expected it to be in the region of Rs 610-620 crore. Its stock closed 2.35 per cent higher at Rs 1900.75 as against its yesterday’s close of Rs 1,857.15.
The company’s net sales grew by 17 per cent to Rs 5,983 crore during the quarter as against Rs 5,118 crore posted in the corresponding quarter last year. The absolute sales grew 11.3 per cent to 1,589,286 units as compared to 1,428,030 units. The company said it was now on course to meet its target of selling six million two-wheelers in the current financial year.
|IN TOP GEAR|
|Rs crore||% Growth|
|Q3 2010||Q3 2011|
|Sales (in nos)||1,428,030||1,589,286||11.29|
|*Profit from operations before other income, interest, tax and exceptional items
Hero MotoCorp, which still sources technology from Japan’s Honda Motor Company and pays royalty on it, saw a 19 per cent increase in prices of raw material consumed during the quarter.
Pawan Munjal, managing director and chief executive, said the industry had this year been facing constraints of rising fuel prices, high interest rates and a sharp rupee depreciation, leading to increased input costs impacting the margin. “We have also seen a softening in commodity prices of late, which has, however, been off-set by the rupee depreciation,” he said in a statement here. “Therefore, while we expect market demand for two-wheelers to remain stable, a lot will depend on the overall economic and political scenario.”
Hero Motocorp, with a market share of 45 per cent, will -- in the next few months -- be launching all new 110cc and a 125cc bike, coupled with a 110cc automatic scooter. It has already launched a new bike called Impulse under the new brand name. Despite the new launches, the company has expressed caution over the coming period.
Consolidated net sales of the company rose by 38% to Rs 2,465.9 cr