Hero MotoCorp's third quarter net profit up 11 percent

Two-wheeler major Hero MotoCorp Tuesday reported an 11 percent increase in its net profit for the quarter ended Dec 31 at Rs.583 crore from Rs.525 crore in the corresponding period of last fiscal.

The total turnover which includes net sales and other operating income decreased marginally by 0.5 percent in the quarter under review and stood at Rs.6,839 crore from Rs.6,877 crore in the corresponding quarter of 2013-14.

"We continue to make investments as we pass through a phase of global expansion, capacity enhancement and brand building and these added expenses have impacted our margins in the third quarter," said Pawan Munjal, vice chairman, chief executive officer and managing director, Hero MotoCorp.

"We believe that these are investments which will yield the desired results in the long term as we relentlessly strive to consolidate our leadership."

According to Munjal, the company maintained a cautious optimism about the business climate as crude prices remained depressed below the $50 mark, and commodity prices continued to remain soft.

"A lot will depend on the much-awaited budget to be presented by the central government later this month," Munjal said.

"While sentiments are already high with the central government expected to revive the economy, the other factors such as interest rates, retail inflation and the likely changes in global economy will also play a role in determining the industry growth in the coming quarters."

The company's sales during the quarter were down 1.92 percent as it sold 1,648,548 units from an off-take of 1,680,940 units in the corresponding quarter of previous fiscal.

The company added that its earnings before interest, taxes, depreciation and amortization (EBIDTA) margins of 12.02 percent.