Double-digit volume growth in scooters and executive bikes helped Hero MotoCorp post a 7.7 per cent growth in sales to ₹7,901 crore in the quarter ended June 2016 over the year ago period.
Despite lacklustre sales of entry bikes, good sale of models such as the Glamour and Super Splendor in the 125cc segment helped average realisations move up by 1.6 per cent to ₹45,268 per vehicle. Raw material cost as a percentage of sales came down to 63.7 per cent from 66.3 per cent a year ago.
These two factors helped operating margins expand by 140 basis points to 15.6 per cent. Net profit grew by 18.2 per cent to ₹883 crore.
Apart from better product mix and cheaper inputs, higher other income helped profit growth.
With rural demand expected to pick up sooner than later, the company’s bread-and-butter entry segment bikes may start delivering in the quarters to come.