Hero Honda rides on sales; net up 78%

Written by fe Bureaus | New Delhi | Updated: Jan 27 2010, 04:12am hrs
Riding on record sales of more than a million units of two-wheelers in a quarter, Hero Honda Motors, the worlds largest two-wheeler manufacturer, on Monday posted a 78.3% jump in its net profit for the third quarter (October-December) of 2009-10 at Rs 535.77 crore compared to Rs 300.42 crore in the corresponding quarter of the last financial year. The companys turnover (net sales and other operating income) for the third quarter jumped 32.8% at Rs 3,827 crore vis--vis Rs 2,881 crore in the October-December quarter of 2008-09.

Hero Honda sold 11,11,372 units in the third quarter ended December 31, 2009, against 8,57,806 in the corresponding quarter of the last financial year, a growth of 29.6%. This is the third consecutive quarter of the current financial year when the companys sales have crossed a million-unit mark, Hero Honda said.

The companys Ebidta margin stood at 17.3% in the quarter vis--vis 14.47% in the October-December quarter of 2008-09.

It has indeed been a phenomenal year for us, as reflected in our both top line growth and bottomline performance. In view of the projected GDP growth and the continued success of government schemes directed at rural infrastructure and employment generation, we are expecting market demand to remain bullish, Pawan Munjal, managing director and CEO, Hero Honda Motors, said in a statement.

The company, which has concluded the calendar year with record sales of over 4.4 million units vis--vis 3.6 million units in 2008, a growth of 22%, is also planning to ramp up capacity to meet the growing demand.

Going forward, we would also have to look at further augmenting our installed capacity in our existing manufacturing plants and also at the possibility of a new plant sometime in the near future, he said.

However, in the short term, we are closely monitoring the movement of commodity prices which are on an upward trajectory.

The rising input costs, as indeed the retail financing situation, remain areas of concern for the industry, Munjal added.