Hero MotoCorp net profit rises almost 500% to Rs 365 cr in June quarter

Hero MotoCorp reported a standalone net profit of Rs 365 crore for the first quarter, up by a massive 498 per cent when compared with a meagre Rs 61 crore in the same period last year.

However, the profit fell 58 per cent on a sequential basis. It was Rs 864 crore in the March quarter.

Revenue from operations of one of India's leading two-wheeler company came in at Rs 5,487 crore in the reporting quarter, up 85 per cent from Rs 2,971 crore in the year-ago period.

Earnings before interest, tax, depreciation, & amortization (EBITDA) for the quarter stood at Rs 515 crore with margins at 9.4 per cent.

"Despite the challenges posed by the pandemic, Hero MotoCorp achieved significant growth in both earnings and profitability compared to the corresponding quarter of the previous fiscal. The company improved its market share in the quarter by more than 200 bps over the full year of FY21," said Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp.

The company said it has sold more than a million units of motorcycles and scooters in the first quarter despite coronavirus related disruptions.

"Nearly half of the first quarter witnessed significant disruptions triggered by localised lockdowns imposed by various state governments and authorities across the country in the wake of escalating coronavirus cases, thereby restricting movement of logistics and dampening customer sentiments," the company said.

"The commodity costs continued to rise, thereby impacting the industry margins. We have taken judicious and measured pricing decisions, reducing the impact on the customers by offsetting part of the increase through the accelerated Leap-2 saving program," the CFO said

Niranjan Gupta said he remains optimistic about demand over the coming months with the start of the festive season and also a healthy monsoon and encouraging farm activity. "With last-mile retail opening up further, we expect numbers to be positive as we move forward."

On Thursday, the scrip closed flat at 2,782.5 on NSE.