Hero MotoCorp Q3 profits up 43% despite high royalty payments to Honda

Roudra Bhattacharya New Delhi | Updated on March 12, 2018

Mr Pawan Munjal, MD &CEO, Hero MotoCorp Ltd


Hero MotoCorp has posted it’s highest-ever profits for a quarter on a 43 per cent growth to Rs 613 crore.

Net sales in the period went up 17 per cent to Rs 5,984 crore, even as two-wheeler sales for the three month period reached record numbers at 15.89 lakh units. In every month across the quarter, it sold over half a million vehicles.

The two wheeler maker’s EBITDA margin in the third quarter stood 15.6 per cent. “We are well in line to meet our guidance for over six million unit sales in the fiscal 2012,” said Mr Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp.

“In FY12 the industry has been facing constraints of rising fuel prices, high interest rates and sharp rupee depreciation, leading to increased input costs impacting the margin. We have also seen a softening in commodity prices of late, which has, however, been off-set by the rupee depreciation. While we expect market demand for two-wheelers to remain stable, a lot will depend on the overall economic and political scenario going forward,” he added.

The profits have gone up even after the company reportedly paid about Rs 180 crore to erstwhile Japanese partner Honda as royalty in the quarter. Royalties are expected to go up with the Yen appreciating around 20 per cent in the period.

Hero MotoCorp plans to launch three new models in the next few months - the 110cc Passion X Pro, a 110cc masculine scooter, Maestro, and a 125cc bike, Ignitor. It is also enhancing its research and development capabilities, where it is currently developing this hybrid technology. The company has also been in discussion with international design houses and technology suppliers for collaboration to develop new models.

Hero MotoCorp shares ended at Rs 1,900.75 per share on the BSE, up 2.35 per cent on Thursday.


Published on January 19, 2012

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