Business Daily from THE HINDU group of publications
Wednesday, Jul 25, 2007
ePaper
Business Daily from THE HINDU group of publications Wednesday, Jul 25, 2007 ePaper |
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Corporate Results
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Two/Three Wheelers
Our Bureau New Delhi, July 24 Amidst high interest rates and falling sales mainly in the 100 cc segment bikes, Hero Honda Motor Ltd (HHML) on Tuesday reported a 20.14 per cent decline in its net profit to Rs 189.84 crore in the first quarter of FY 2007-08 against Rs 237.74 crore in the corresponding quarter last fiscal. The company reported a marginal increase in its total income by 2.90 per cent to Rs 2,486.90 crore for the quarter against Rs 2,416.65 crore in the corresponding period last year. The company reported a marginal increase in its net sales by 3.5 per cent to Rs 2,447.99 crore from Rs 2,364.37 crore in the corresponding period last year. “The first quarter of this financial year has not been encouraging for the auto industry in general, with uncertainty over interest rates making customers postpone their purchases,” said Mr Brijmohan Lall Munjal, Chairman, HHML. However, Hero Honda improved its EBITDA (earnings before interest, tax, depreciation and amortisation) to 10.76 per cent from 10.18 per cent. Industry analysts are of the view that Hero Honda has improved its margins due to change in its product mix. According to them, the company has generated higher sales in the executive segment as compared to the entry level segment. It has witnessed declining sales in the 100 cc segment and has faced problems in selling more volumes in the 125 cc segment but is expected to continue clocking higher sales in the 150 cc segment, say auto analysts. ‘The company has outperformed the industry mainly due to increase in sales of high-end segment bikes that are not so price sensitive and also have a higher realisation on margins. But the trend could reverse by the end of this quarter as Bajaj is gearing up to launch its new bike to compete with Splendor in September,” said an analyst from B&K Securities India.” Mr Pawan Munjal, Managing Director, HHML said, “During the quarter, we launched – Splendor NXG and the refreshed model of Pleasure. And today, we are announcing the launch of the new look Passion Plus and Super Splendor.” While Passion Plus with cast alloy wheels has been priced at Rs 42,750, Super Splendor would be available in two variants of spoke/drum/self and cast/drum/self at Rs 44,150 and Rs. 44,900 ex showroom, Delhi.
Related Stories: More Stories on : Two/Three Wheelers | Hero Honda Motors Ltd
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