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Hero MotoCorp, the country’s largest two-wheeler manufacturer, on Tuesday reported a standalone net profit of ₹772.06 crore for the second quarter ended September 30, up 1.13 per cent, compared with ₹763.37 crore in the corresponding period last year.
However, total sales fell by around seven per cent during the July-September quarter to 15,74,861 units, against 16,92,523 units in the same quarter last year. Total income from operations also declined by more than one per cent to ₹6,837.09 crore during the period, against ₹6,915.34 crore in the corresponding quarter last year. EPS stood at ₹38.66 against ₹38.23.
The company said it has achieved many milestones during the quarter and hoped that the trend would continue.
“The quarter also saw the beginning of a sales revival and we are cautiously optimistic that this trend will continue in the second half of the fiscal year. The festival season could lead to positive sentiment in the market, which may help maintain the momentum in the coming months,” said Pawan Munjal, Chairman, Managing Director, and Chief Executive Officer.
Overseas venture During the quarter, the company’s first overseas manufacturing facility also became operational at Villa Rica in Colombia, a major landmark in the global journey of Hero MotoCorp, he said.
With a project cost of $70 million, the plant will initially produce 80,000 units of two-wheelers, which will go up to 1.50 lakh units in the second phase of expansion, the company said.
According to analysts, the company’s results were ahead of the estimates.
“Hero managed to improve the margins despite volume declines and posted a record five year highest operating margin of 15.8 per cent. Subdued commodity prices coupled with cost control initiatives helped Hero to improve margins steeply by 230 bps YoY and better our estimates of 14.7 per cent,” Bharat Gianani, Senior Research Analyst - Automobile, Angel Broking, said.
Hero MotoCorp’s shares closed at ₹2,605.05 on the BSE on Tuesday, down 0.33 per cent from the previous close.
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