India’s largest two-wheeler manufacturer Hero MotoCorp on Thursday reported a 20.4% year-on-year decline in net profit at Rs. 488 crore for the third quarter ended December 31 against Rs. 613 crore a year ago due to sluggish demand for motorcycles and scooters and high costs.
SLOWING DOWN? A worker cleans a bike at a Hero MotoCorp showroom in Mumbai on Thursday. Photo:Reuters
Though its turnover grew by almost 2.5% to Rs. 6,188 crore against Rs. 6,036 crore in the same quarter of the previous fiscal, operating margin during the quarter fell to 12.6% from 15.6% in the year-ago period.
Arch rival Bajaj Auto had reported a higher operating margin of 20.1% on Wednesday. Bajaj was able to grow its profits by 3% during the quarter.
“The last two quarters have been challenging for the Indian auto industry on account of the delayed monsoons, rising fuel prices and subdued sentiments,” said Pawan Munjal, managing director and chief executive officer, Hero MotoCorp.
“There are early signs of a recovery though. Our despatches were consistently over five lakh every month of this quarter. We hope the industry will revert to higher growth rates in near future. Whenever that happens, we will be geared-up to meet the upsurge in demand,” he added.
The company’s sales volume during the quarter went down by 1% to 15,73,135 units against 15,89,286 units in the corresponding quarter of the last fiscal.
The company’s share prices fell by 0.9% to close at Rs. 1,819 on the Bombay Stock Exchange on Thursday.