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Jul 20, 2012, 08.29 AM IST
Country's largest two-wheeler manufacturer Hero Motocorp's net profit rose lower than expected by 10.25% year-on-year to Rs 615 crore in the first quarter of FY13.
India's largest two-wheeler maker Hero MotoCorp reported a lower-than-expected 10% year-on-year rise in first quarter net profit at Rs 615 crore.
Its revenue in April-June also rose 10% to Rs 6,247.3 crore.
Analysts on average had expected Hero MotoCorp to report a net profit of Rs 630 crore on revenue of Rs 6,370 crore in the quarter, according to CNBC-TV18 estimates.
The company ha so far whethered the slowdown that has hurt rival automakers like Bajaj. Hero MotoCorp reported highest-ever sales volumes in the quarter at 16,42,292 units. But it warned that sales could be impacted in the near future if monsoon rain was poor.
"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. 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. 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," said Pawan Munjal, MD and CEO.
He further said that the currency volatility was also a concern and the rupee depreciation was likely to hurt margins.
Hero MotoCorp's EBITDA (earnings before interest, taxes, depreciation and amortization) margin was at 15%, versus 14.3% in the year-ago quarter.
The company had ended its over two-decade old partnership with Japan's Honda in 2010 and recently announced an investment of over Rs 2,500 crore to set up new plants at Gujarat and Rajasthan, apart from expanding its existing capacity and building an integrated research and development centre at Rajasthan.
With this expansion, Hero said its total installed capacity would top 9 million units in two-year's time, which is in-line with the stated objective of reaching 10 million units in the next five years.
Hero MotoCorp's shares closed down 1.2% at Rs 2,088.70 on NSE on Thursday.
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