Hero MotoCorp profit vrooms after two quarters

Earns Rs 914-cr profit in June quarter

Country’s largest two-wheeler maker Hero MotoCorp on Tuesday reported 3.5 per cent growth in net profit for the first quarter ended June 30. The company earned a profit of Rs 914 crore in the quarter against Rs 883 crore in the corresponding period last year. This is the first growth in profit after two consecutive quarters (Q3 and Q4, FY17) of decline in profit.

Revenue from operations grew over seven per cent to Rs 8,613 crore during the quarter ended June 30. Ebidta margin for the quarter stood at 16.3 per cent against 16.6 per cent in the corresponding quarter last year. The raw material cost per unit increased 2.26 per cent to Rs 29,492 crore for the quarter. The firm did not disclose the impact arising out of compensation to dealers who incurred losses on inventory while migrating to goods and services tax from July 1. The previous two quarters were impacted by demonetisation and the Supreme Court order on BS-III two-wheelers, leading to a dip in profit. 

Hero sold a record 1.85 million units during the quarter, reporting growth of over six per cent over the corresponding quarter of the previous fiscal. Hero said it invested Rs 20.05 crore in Ather Energy during the quarter. Ather is engaged in designing and manufacturing of electric vehicles. 

“The new financial year (FY18) promises to be an exciting one for the industry. In the first three months of this fiscal, we further consolidated our domestic motorcycle market share by clocking an all-time high sales in the quarter. The growth in the domestic market was aided by an improvement in overall market sentiment and robust demand,” said Pawan Munjal, chairman, managing director and chief executive officer, Hero MotoCorp. He said the company has planned several new product launches over the next few quarters to expand its market share.