Companies

Hero MotoCorp Q1 net profit down 95% to ₹61 crore

Our Bureau New Delhi | Updated on August 13, 2020 Published on August 13, 2020

Cost control and efficiencies enabled to limit the impact of the unprecedented times, says Niranjan Gupta, Chief Financial Officer

Country's largest two-wheeler maker Hero MotoCorp on Thursday reported a net profit of ₹61.31 crore for the first quarter ended June 30, a year-on-year (YoY) decline of 95 per cent as compared with ₹1,257.34 crore in the corresponding period last year.

Revenue of the company also declined by 62 per cent YoY to ₹3,120 crore during the period as against ₹8,249 crore in the April-June quarter last year.

The company sold 5.65 lakh units of two-wheelers during the period in review as compared with 18.43 lakh units in the corresponding period last year.

“The Covid-19 period has been an unprecedented challenge for the automotive industry, as indeed for several other sectors and economies around the world. Hero MotoCorp was quick to begin work on cost control and efficiencies that enabled us to limit the impact of the unprecedented times during the first quarter of the financial year," Niranjan Gupta, Chief Financial Officer, Hero MotoCorp, said.

Cash conservation efforts and rationalisation of expenses, along with productivity enhancement measures, have helped the company pass through the uncertain period as it now enters the phase of rapid recovery and return of demand, he said.

"We are already seeing green shoots, and expect them to sustain and get stronger as we move towards the festive season. Our July month sales were more than 95 per cent of pre-covid sales, and we do see a positive trend moving forward,” Gupta added.

With strict safety measures and protocols in place, about 95 per cent of the customer touchpoints of Hero MotoCorp are fully operational, and the company’s eight production facilities - six in India and two in global markets have resumed manufacturing, the company said.

During the quarter 1,674 equity shares of ₹2 each were issued and allotted under the employee incentive scheme - 2014, the company said.

It also said that after the quarter ended June 30, the company has invested ₹84 crore as part of capital contribution in the associate company - Ather Energy taking cumulative investment to ₹414.58 crore.

Shares of Hero MotoCorp closed at ₹2,811.25 apiece on the BSE on Thursday, up 1.35 per cent from the previous close.

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Published on August 13, 2020
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