Hero MotoCorp sees first rise in profit in 5 quarters

Company seeing momentum ahead of festive season: CEO & MD Munjal

 

Hero MotoCorp, the country’s largest two-wheeler maker, on Wednesday reported its first increase in quarterly profits in five quarters.

For the quarter ended September, its net profit stood at Rs 481.41 crore, a rise of 9.3 per cent compared to Rs 440.5 crore in the corresponding period last year. Net sales stood at Rs 5,726.2 crore, against Rs 5,187.4 crore in the year-ago period, a rise of 10.4 per cent.

In the September quarter, Hero MotoCorp’s sales, in terms of volume, increased 6.3 per cent to 14,16,276 units, compared with 13,32,805 units in the corresponding period last year. “These numbers bode well for the festive season. The sentiment is positive and there is momentum for us in the market. We are definitely looking at demonstrating our leadership through record despatches and retail sales during the festive period,” said Pawan Munjal, chief executive officer and managing director, Hero MotoCorp.

Earnings before interest, tax, depreciation and amortisation margin for the September quarter stood at 14.5 per cent. “With our performance in the second quarter of FY14, we have clearly demonstrated we can have good margins, even as we strengthen our market leadership,” Munjal said.

He, however, added the industry continued to face challenges, as the country was passing through difficult times. The rupee depreciation, which adversely impacted several sectors, raised the costs of essential commodities such as steel, nickel, copper and rubber. For Hero MotoCorp, expenses rose 8.9 per cent in the September quarter to Rs 5,180.4 crore, against Rs 4,757.78 crore a year earlier.

“These higher input prices, combined with increasing labour costs, are likely to put a lot of pressure on margins in the industry. We will, therefore, be innovative in tackling these cost pressures to protect our margins,” Munjal said.

HERO MAKES A COMEBACK

* Hero's net profit stood at Rs 481.41 crore, against Rs 440.58 crore last year

* The company’s sales grew 6.3% to 14,16,276 units, compared with 13,32,805 two-wheeler sold last year

* The company says rupee depreciation has raised input costs, putting pressure on margins in the industry

* Hero is looking at demonstrating its leadership by record despatches and sales during festive period