Hero Honda Q1 Net Seen Over 30%

Analysts expect the country's largest motorcycle manufacturer, Hero Honda Motors Ltd, to report over 30 per cent growth in its net profit for the first quarter (Q1) ended June 30, riding high on increased domestic sales.

The company's board is meeting tomorrow to take on record the company's financial performance during the first quarter of the current financial year.

"We expect the company the close the quarter with a net profit of Rs 80.7 crore, on net sales of Rs 972.9 crore in the quarter," an automobile analyst with Mumbai-based brokerage Motilal Oswal Securities said. As per his analysis, Hero Honda's Q1 net will, therefore, rise by 34 per cent over Rs 60.3 crore of Q1 last fiscal, while net sales for the April-June period will improve equally at 34 per cent over Rs 728 crore registered in the corresponding period last year.

Analysts also point out that while a recent report from securities firm Cazenove & Co has forecast the company will report a 37 per cent jump on net profit and a 33.7 per cent on net sales during Q1, according to ICICI Securities, Hero Honda's net profit will rise of 25 per cent and its net sales 28 per cent during the same period.

Honda Motor Company, Japan, and the Munjals hold 26 per cent each in Hero Honda, which dominates the domestic motorcycle market with a share of around 50 per cent. It also controls more than 30 per cent of the country's total two-wheeler market including motorcycles, scooters and mopeds.

The company's four-stroke 100 cc bike Splendor is the largest selling two-wheeler in the world and accounts a major part of Honda's global revenues from two-wheeler sales.

Analysts pointed out that Hero Honda is in fact riding on the success of the Splendor, which contributes nearly 60 per cent of its sales, besides its latest launch Passion. According to the company, its Q1 sales have increased by 28.1 per cent to 306,930motorcycles. At the end of the financial year ended March 31, 2001, its net profits increased 28.52 per cent to Rs 24.7 crore. It also sold in excess of 1 lakh motorcycles.