Hero MotoCorp. Q3 reports 23.2% increase in net profit, stands at Rs 1,084 crore
On Thursday, Hero MotCorp. reported a 23.2% year on year increase in net profit to ₹1,084 crore for the quarter ending 31 December. The net profit also increased on a sequential basis from ₹953.4 crore in the September quarter.
The automaker reported a net profit of ₹880.41 crore in the corresponding period as sales took a hit due to economic slowdown and transition to new safety and emission norms.
Hero’s net sales for the quarter improved by 39.7% to ₹9776 crore as a result of 19.7% increase in sales of motorcycles and scooters to 18.45 lakh units. On a month on month basis, revenue improved marginally from ₹9367.34 crore in the September quarter.
Despite increase in overall cost during the quarter, the company’s operating profit grew by 36.1% to ₹1414 crore and margins stood at 14.5%. Hero’s raw material cost jumped by 46.8%, while employee and other expenses also increased by 9.9% and 15.2%, respectively.
Hero witnessed substantial jump in sales of its entry level motorcycles in the rural and semi urban areas as result of faster recovery in rural areas and increased preference for personal mobility to avoid the COVID-19 infection.
Hero manufactured a record 8 lakh motorcycles and scooters in October expecting robust recovery in vehicle sales during the Diwali and Dhanteras festival but the company reduced production sharply as retail sales did not pick up on expected lines. During the quarter Hero signed a distribution and licensing agreement with American motorcycle manufacturer Harley Davidson, to sell and service its premium motorcycles in India. Both companies will also jointly develop products for India and emerging markets.