Hero MotoCorp Q1 net marginally up at Rs 563 cr

The company elevated current CEO Pawan Munjal as Vice-Chairman

The country's largest two-wheeler maker Hero MotoCorp today reported 2.58% increase in net profit at Rs 562.76 crore for the first quarter ended June 30, 2014. The company had posted a net profit of Rs 548.58 crore during the corresponding period of the previous financial year. Its net profit performance was below Bloomberg consensus analyst estimates of Rs 618 crore.

The company also announced elevation of its current MD and CEO Pawan Munjal as the Vice Chairman and Managing Director of the company. Brijmohan Lall Munjal is the chairman of the company.

Net sales of the company went up by 14.24% to Rs 6,999.40 crore for the first quarter as compared to Rs 6,126.84 crore recorded during the same period of previous financial year. Total income from operations too grew by 14.24% to Rs 7,036.84 crore, in line with estimates of Rs 7,049 crore. Expenses increased at a slightly faster clip by 15.6% to Rs 6,381.16 crore. Operating margin for the quarter declined to 13.5% as against 14.8% recorded in the year-ago period.

In a conference call with analysts the company’s chief financial officer Ravi  Sud said that tax on long-term investments, depreciation and differential excise on inputs and outputs at Hero MotoCorp’s facility in Hardwar impacted profit.

In terms of volumes, the company's total sales during the quarter stood at 1,715,254 units, which is an increase 10% over 1,559,282 units sold in the same period of previous fiscal. Munjal said: "We have continued to sustain our robust volume growth despite the overall sluggish industry scenario."

"Despite the sub-normal monsoon in some parts of the country impacting sentiments, we are confident of consolidating our market leadership by clocking growth in the double digit in rest of the fiscal," he added.

The company has also declared an interim dividend of Rs 30 per equity share.

The company announced its quarterly results after the market hours. Shares of Hero MotoCorp closed at Rs 2584.20 , down by 0.86% from its previous close on the Bombay Stock Exchange (BSE).