Hero Honda Net Up 52%; To Seek Nod For Buyback

Hero Honda Motors registered a growth of 52 per cent in its profit after tax which stood at Rs 76.60 crore for the financial year 1997-98. The turnover of the company stood at Rs 1160.72 crore, a growth by 51.5 per cent compared with the previous year.

The earning per share (EPS) also registered a growth of 52 per cent, at Rs 38.36 per share.

The company, which held 36 per cent market share in the motorcycle segment during the financial year 1997-98, could improve its performance significantly due to multiple factors.

The factors which had contributed to its performance include fuel efficiency of the products, their design, quality, after sale service and low emission levels, states a company press release.

Following the positive results, the board of directors of Hero Honda Motors has recommended a 1:1 bonus for its members.

Speaking after the board meeting, Brijmohan Lall Munjal, chairman and managing director, said that since the company had accumulated reserves of Rs 187 crore it had resolved to recommend a 1:1 bonus and this would increase the equity from Rs 19.97 crore to Rs 39.94 crore.

The company would undertake necessary formalities to increase the authorised capital which includes an amendment in the Memorandum and Articles of association of the company.

In view of the anticipated amendment in the Companies Act, the board has also recommended a buy-back of shares up to the maximum of 10 per cent of the equity capital. Both resolutions would be placed before the annual general meeting which is scheduled to be held on July 27, 1998.

The company has embarked upon a plan to further consolidate its market position by improving its products and services.

Considering the past performance of the company and the inherent strength it has acquired in terms of management of technology, processes and people, the projected 30 per cent growth for the current financial year (1998-99) is considered realistic, the release states.