Business Standard reported that Hero MotoCorp 27% decline in net profit to INR 440.58 crore in the July to September quarter, as sales dropped on slowing demand and tough competition.
The two wheeler market in India has witnessed the adverse impact of the economic slowdown, rising fuel costs and relatively high interest rates. Hero’s sales, on the other hand have been impacted due to a strong push by its previous partner Honda Motor Co, which has been trying to get a strong foothold in the Indian market after it broke up with Hero last year.
Mr Pawan Munjal CEO of Hero MotoCorp in a statement said that “Sensing the slowdown in the market, we led the way in adjusting our production plans in August and September, and this has been reflected in our quarterly sales figures.”
However, Hero sold 13,32,805 units during the quarter under review down 13.67% compared to 15,44,315 units during the corresponding period of the last financial year.
The company’s stock dropped 1.9% on the Bombay Stock Exchange before the results were announced and was last traded at INR 1,795.95. It had reported its net profit at INR 603.62 crore in the July to September quarter of the last financial year. Hero’s net income during the July to September quarter stood at INR 5,187.46 crore, down 10.96% as against INR 5,826.15 crore in the corresponding period last year.
The company’s operating margin during the quarter was at 13.86% down from 15.76% in the corresponding quarter last fiscal. During the previous quarter, it reported the operating margin at 15%. However, Munjal is hopeful the festive season would boost the company’s sales.
Mr Munjal said that “The onset of the festive season has been encouraging, with retail sales of over 200,000 units during the Navratras.”
He said that the company hopes its global business plans will take shape this fiscal. It planned to launch Hero products in new international markets including Nigeria, Kenya and Guatemala. It already exports to Sri Lanka and Nepal.
Source - Business Standard
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