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Hero Motocorp Ltd reported a 27 per cent drop in net profit for the second quarter of the current fiscal at Rs 440.58 crore.
The company’s turnover for the quarter under review saw a decline of 11 per cent at Rs 5187.46 crore, due to the slowing down of demand and rising competition.
Pawan Munjal, Managing Director and Chief Executive Officer, Hero Motocorp, in a statement said, “The two-wheeler market in the country has been adversely impacted due to the overall market slowdown and prevailing sentiments since the beginning of the quarter. Sensing the slowdown in the market, we led the way in adjusting our production plans in August and September, which has been reflected in our quarterly sales figures.”
He added that the company would continue with new launches and expand its distribution reach to over 5,400 outlets this fiscal.
The company also said it plans to launch Hero products in international markets such as Nigeria, Kenya and Guatemala this fiscal. Hero Motocorp recently started despatching its new 110 cc motorcycle, the Passion X Pro.
Yaresh Kothari, Research Analyst- Automobile Angel Broking, said, “Hero MotoCorp reported lower-than-expected results for quarter led by deterioration of operating margins. Margins were impacted on account of unfavourable product-mix due to higher share of less than 125 cc motorcycles; lower operating leverage benefits due to production cuts, besides and higher other expenditures.”
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