Two-wheeler market leader Hero MotoCorp on Thursday met street estimates with its net profit growing 71% on a year-on-year basis to Rs 814.16 crore for the three months to March. A poll of analysts by Bloomberg had estimated the net profit to be at Rs 814.0 crore. Total income during the period increased 10.6% to Rs 7,512.17 crore.
The company's Ebitda at Rs 1,175.81 crore was up by 40.24% and Ebitda margin of 15.65% was 331 basis points higher compared to its performance in the same period last year.
The higher Ebitda was aided by a growth of 9.25% in total units sold during the period, which took the sales volume to a highest quarterly figure of 17,21,240. Also, the company has undertaken several margin improvement initiatives during the year, the company said in a statement. Lower growth in cost of raw materials also benefited the company.
For the complete year 2015-16, the company posted a net profit of Rs 3,132.37 crore which was 31.3% higher. The revenue for the year was Rs 28,599.3 crore with an Ebitda margin of 15.55%.
“In FY16, we made strong progress towards our strategic goals and delivered impressive performance, both in terms of sales and financials in the second half of the year while the industry continues to remain sluggish and sentiments are still subdued,” Hero MotoCorp chairman and managing director Pawan Munjal said.
“For FY17, we continue to remain cautiously optimistic. The industry hopes for a good monsoon, which may help market sentiments to improve towards the second half of this fiscal,” he said.
For the January-March period, the total expenses for the company stood at R6,451.81 crore which was 6.72% higher compared to the same period last year. Raw materials cost saw a modest growth of 2.9% during the quarter compared to the same period last year.
Finance costs came down from Rs 75 lakh in the same period last year to Rs 53 lakh.
Hero MotoCorp also announced a final dividend of Rs 32 per share of face value of Rs 2, for 2015-16. This along with the interim dividend of Rs 40, aggregates to an annual dividend of Rs 72 per share, or 3600%. Shares of Hero MotoCorp on Thursday closed 0.13% lower at Rs 2893.95 on the BSE.