New Delhi: Hero MotoCorp Ltd on Thursday said net profit in the first quarter rose 10% over a year ago to Rs615 crore and warned that the depressed monsoon may affect sales in the coming months.
The country’s largest two-wheeler maker sold 1.64 million two-wheelers in the three months ended 30 June, growing at 7.4%.
“The two-wheeler industry in the country, although still very untapped, has slowed down over the past couple of months, and the growth has come down to single-digit,” chief executive Pawan Munjal said.
“Going forward, a lot will depend on a good monsoon and the consequent harvest to get the buyers to exercise their decision to purchase, and not postpone it,” he said. “We have so far seen only a patchy monsoon, and this might reflect on retail sales in rural and upcountry markets in the coming months.”
Currency volatility is also a concern, Munjal said. “The rupee depreciation is likely to impact our margins,” he said. “However, we remain optimistic of coming back to double-digit growth by leveraging our strong brand and the advantage of our wide network.”
In a call with investors, the company said it expects the industry to grow at 10% over last year and that it expects to outgrow the industry.
Hero’s net sales in the first quarter rose 9.95% to Rs6,247.28 crore. Its margin on earnings before interest, taxes, depreciation and amortization stood at 15%.
Shares of the company fell 1.37% to Rs2,087.50 on the Bombay Stock Exchange on Thursday, while the Sensex rose 0.55% to 17,278.85 points.