Companies

Hero MotoCorp second quarter profit slips 10% to ₹875 crore

Our Bureau New Delhi | Updated on October 23, 2019 Published on October 23, 2019

Representative image.   -  Bloomberg

Revenue also falls 17% to ₹7,571 crore

Hero MotoCorp, the country’s largest two-wheeler company, on Wednesday reported a standalone net profit of ₹875 crore for the second quarter ended September 30, down 10 per cent on a year-on-year (YoY) basis compared with ₹976 crore in the corresponding previous period.

The company's revenue from operations for the quarter also declined 17 per cent y-o-y and stood at ₹7,571 crore as against ₹9,091 crore in the same period last year. EBIDTA margin for the quarter stood at 14.5 per cent, the company said.

During the quarter, the company sold 16,91,420 units of two-wheelers, down 21 per cent y-o-y as against 21,34,051 units in the same period last year.

“'Growth of the industry is driven by first-time customers. We have, therefore, aggressively pursued this segment of customers through various innovative financing options, both in terms of affordability and convenience. This has helped us expand our customer base during the ongoing festive season. We are also gearing up for the market launch of our first BS-VI motorcycle soon after the festive season, which will mark the commencement of the sequential transition to our BS-VI range over the next few months,” Sanjay Bhan, Head - Sales, Aftersales and Parts, Hero MotoCorp, said.

Encouraging response

The company launched five new products, including three new premium motorcycles and two scooters, in the first five months of the financial year and the initial market response to these products — XPulse twins and Xtreme 200S motorcycles — and Maestro Edge 125 Fl and Pleasure+ 110 scooter has been encouraging, the company said.

“Our retail sales during the ongoing festive season have been quite steady so far, thanks to the new motorcycles and scooters that we have launched recently, and our slew of innovative schemes for customers. We hope to keep the momentum during the upcoming Dhanteras and Diwali festivals,” Niranjan Gupta, Chief Financial Officer, Hero MotoCorp, said. During the quarter ended September 30, the company introduced a voluntary retirement scheme (VRS) and it has considered a provision of ₹60.11 crore for employees who have accepted to be part of the VRS as exceptional item in the standalone financial results.

On April 26, the Board of Directors had recommended a final dividend of ₹32 per equity share (face value of ₹2 per equity share) for the financial year ended March 31, 2019, which has been approved by the shareholders in the annual general meeting held on July 29.

Accordingly, ₹639.13 crore (excluding dividend distribution tax) was appropriated as distribution to equity shareholders during the quarter ended September 30, the company informed.

Shares of Hero MotoCorp closed at ₹2,712.25 apiece on the BSE on Wednesday, up 1.45 per cent from the previous close.

Published on October 23, 2019
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