India’s largest two-wheeler manufacturer Hero MotoCorp on Tuesday reported a 2.58% year-on-year rise in net profit to Rs 562.76 crore for the quarter ended June 2014 against Rs 548.58 crore last year.
The company blamed higher cost of raw materials and compensation to its dealers — for the unforeseen excise cuts announced in the interim budget in February — as the main reasons for the lacklustre results.
The marginal increase in profit came on the back of an over 14% increase in turnover at Rs 7,036.84 crore during the quarter over Rs 6,159.52 crore. The firm’s two-wheeler sales during the quarter also went up 10% to 1,715,254 units — the highest ever in a quarter.
The board of directors of the company also approved the appointment of the firm’s current managing director and CEO Pawan Munjal as the vice-chairman of the firm.
“We have continued to sustain our robust volume growth despite the overall sluggish industry scenario. Despite the sub-normal monsoon in some parts of the country impacting sentiments, we are confident of consolidating our market leadership by clocking growth in the double digit in rest of the fiscal,” said Munjal.
The firm had last year announced plans to enter 50 new markets by 2020 with a cumulative sales target of 100 million with 20 manufacturing facilities across the globe and an overall annual turnover of Rs 60,000 crore.
The company’s share price declined 0.86% to Rs 2,584.20 on the Bombay Stock Exchange.