Hero MotoCorp fails to beat estimates despite good festival sales

Our Bureau Updated - March 12, 2018 at 09:20 PM.

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Hero MotoCorp reported a 7.5 per cent increase in net profit for the December quarter at ₹524.66 crore, riding on strong festival season sales.

In the corresponding quarter last year, the company’s net profit stood at ₹487.89 crore

Income from operations rose 11 per cent to ₹6,846 crore during the quarter against ₹6,151 crore in the corresponding period last year.

The company sold 16.81 lakh two-wheelers in the December quarter against 15.73 lakh units in the year-ago period.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) margin for the third quarter stood at 13 per cent.

“Our EBITDA has been affected due to partial recovery of rising metal costs and currency fluctuation.

“We continue to sustain our market leadership quarter after quarter with a strong focus on performance and profitability,” said Pawan Munjal, Managing Director and Chief Executive Officer.

Other expenses Analysts said EBITDA fell below estimates due to an increase in other expenses.

“The higher other expenses were attributable to increased advertising spends related to festive sales and the adverse impact of the rupee’s depreciation during the second quarter, which impacted the third quarter,” said Mihir Jhaveri, Director, Institutional Research, at Religare Capital Markets.

“The company was also not able to fully pass through increased commodity costs during the quarter,” added Jhaveri.

Hero MotoCorp’s shares closed at ₹1,999.75 on the BSE, down 3.43 per cent from the previous close.

Published on January 30, 2014 11:13