Hero Honda’s earnings have gone into reverse gear. The company posted a 16.23% fall in profits to Rs502 crore. That number is despite record sales of 1.4 million bikes. Hero Honda says rising costs of raw materials have eaten into its profits. Another factor was the aggressive spending on advertising for cricket World Cup. But the company says it plans to spend Rs900 crore on increasing its capabilities. The money will go into research and development as well as expanding capacity at new and existing plants. News of the results didn’t do Hero Honda’s shares any good. They fell 3.63% on the BSE to 1600.10.
Growth in India’s services industry accelerated in April. The HSBC Markit Purchasing Managers’ Index increased to 59.2 during the month. In March the index stood at 58.8. The April numbers indicate rising demand- just what the Reserve Bank has been trying to control through its rate hikes.
Indian markets fell for an eighth straight day, and one day after the Reserve Bank’s rate hikes. The Sensex tumbled 65 points to 18,469. And the Nifty lost 28 to 5,537.