The country's largest two-wheeler maker Hero Moto Corp on Tuesday posted a 35.89 per cent increase in consolidated net profit at Rs 1,256.69 crore for the first quarter ended June 30, 2019 on the back of a one-off exceptional gain of Rs 737.48 crore.
The company had reported a net profit of Rs 924.74 crore during the same period of previous fiscal.
Revenue from operations, however, declined to Rs 8,185.97 crore for April-June period as compared with Rs 8,913.27 crore in the same period of 2018-19, Hero Moto Corp said in a regulatory filing.
The company had deposited and created provision for "National Calamity Contingent Duty" (NCCD) including applicable cess in its Haridwar plant during prior years, while contesting the same on the ground that NCCD is in nature of excise duty and should be covered by area-based exemption.
Pursuant to favourable order from the Supreme Court, the provision has been reversed as exceptional item in the current quarter and necessary refund applications already filed with the department, the company said.
"The overall economic and customer sentiments continued to be soft during the first quarter of this fiscal and their impact is clearly visible in the performance of the auto sector," Hero MotoCorp Chief Financial Officer Niranjan Gupta said.
The outlook for the rest of the year will be dependent on multiple factors, including the progress of monsoon and festive season offtake, as well as improvement in liquidity, he added.
Given the dependence of multiple sectors and millions of jobs on auto industry, it is imperative for the government to take urgent steps to boost consumption, Gupta said.
"We would, therefore, reiterate our appeal to the government to bring down GST on two-wheelers to 18 per cent from the current level of 28 per cent, in order to provide the much-needed relief to the sector," he added.
A reduction in GST will lower the cost of two-wheelers and spur demand, with the consequent growth in volumes offsetting any impact on the government revenue, Gupta said.
Shares of Hero MotoCorp on Tuesday ended 6.01 per cent lower at Rs 2,259.35 apiece on the BSE.