New Delhi: India’s largest two-wheeler maker, Hero Honda Motors Ltd, posted a 34% increase in net profit for the quarter gone by, propelled by brisk sales, declining raw material prices and a lower tax bill, at a time when rival manufacturers are expected to report shrunken numbers.
Net profit for the quarter ended 31 March was Rs402.17 crore. Revenue, which includes net sales and other operating income, increased 22% to Rs3,422.52 crore.
Full fiscal-year net profit was Rs1,281.76 crore, an expansion of 32.4% from the year before, and sales 19.2% more at Rs12,356.88 crore. The company will pay a dividend of Rs20 a share.
Upbeat: Pawan Munjal, MD of Hero Honda Motors. Ramesh Pathania / Mint
Nine analysts polled by Mint on 20 April had estimated Hero Honda’s full-year sales at Rs12,196.82 crore and profit at Rs1,244.99 crore.
A fall in raw material prices helped the company improve Ebitda (earnings before interest, taxes, depreciation and amortization, or a measure of operational profitability) margins to 16.04% in the quarter gone by, from 14.5% in the year-ago quarter.
The benefits of lower incidence of taxes, partially because of a new factory at Haridwar in Uttarakhand, which gives new industries a five-year tax holiday, helped lower the firm’s income tax rate by 3.5 percentage points to 28% in the fiscal gone by.
Hero Honda Motors sold 997,855 motorcycles in the last quarter, nearly 13% more than the 884,075 a year earlier. For FY09, it sold 3.72 million bikes, a 12% rise, as rivals Bajaj Auto Ltd and TVS Motor Co. Ltd saw sales dip.
(Shally Seth in Mumbai and Vipin V. Nair of ‘Bloomberg’ contributed to this story.)