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Country’s largest two-wheeler manufacturer, Hero MotoCorp shares tanked 7.08 per cent to ₹2,208.35 on the BSE on Tuesday after the exchange sought clarification on reports that claimed that the I-T Department finds ₹1,000 crore false expense claims by Hero MotoCorp.
According to analysts, despite the fall, the stock does not look attractive in the long term due to pressure on its volumes and a tepid outlook given the rise in fuel costs, slow recovery in both urban and rural markets and a 25-30 per cent hike in acquisition costs of the two-wheelers since the pandemic started.
The company, in its clarification, said that the “allegations made in the press report are not borne out of any document that have been served on us or our internal documents. Therefore, we categorically deny the speculative press reports”.
“We wish to clarify that officials from the Income Tax Department visited our offices in the previous week. The company has provided all support, necessary documents and data to the authorities and will continue to do so if required,” it added.
It further said that as and when the tax department concludes its findings and communicates to the company, it will inform the exchanges suitably.
“Hero MotoCorp is a law-abiding corporate, with robust internal financial controls and its financial statements are duly audited. We are conscious of our obligation under the SEBI (Listing Obligations and Disclosure Requirements)...we have been discharging the same on a regular basis and shall continue to do the same,” Hero MotoCorp said.
On March 23 and 24, the I-T Department had conducted raids at multiple premises of Hero Motorcorp as part of a tax evasion investigation against the company, and offices and residential premises of the company including that of Pawan Munjal, Chairman and Chief Executive Officer, located in Gurugram (Haryana), Delhi and few other locations.
The company had called it a ‘routine inquiry, which is not uncommon before the end of the financial year’.
Price hike
Meanwhile, the company had announced an upward revision of its motorcycles and scooters, from April 5 by up to ₹2,000.
“The price revision has been necessitated to partially offset the impact of increasing commodity prices. The price revision will be up to ₹2,000 and the exact quantum of increase will be subject to specific model and the market,” it said.
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