MUMBAI: Hero MotoCorp today reported a 498 per cent year-on-year rise in net profit to Rs. 365 crore for the quarter ended June, which was below the Street’s estimate.
The country’s largest two-wheeler maker reported an 85 per cent year-on-year rise in revenue from operations to Rs. 5,487 crore, which was also below estimate.
“The first quarter of this fiscal has been adversely impacted by Covid-19. Despite the challenges posed by the pandemic, Hero MotoCorp achieved significant growth in both earnings and profitability,” said Chief Financial Officer Niranjan Gupta.
The strong growth in net profit and sales on a year-on-year basis for the company was aided by a depressed base in the year-ago quarter, which was impacted by the national lockdown to contain the spread of the COVID-19 pandemic.
On the operating front, the company’s earnings before interest, tax, depreciation and amortization jumped 377 per cent on-year to Rs. 515 crore. The company’s operating margin in the quarter stood at 9.4 per cent.
“The commodity costs continued to rise, thereby impacting the industry margins. We have taken judicious and measured pricing decisions, reducing the impact on the customers by offsetting part of the increase through the accelerated Leap-2 saving program,” Gupta said.
Hero MotoCorp sounded optimistic on future demand as it suggested that retail sales should pick up due to the onset of the festive season and normal monsoons this year.
Shares of Hero MotoCorp ended flat at Rs. 2,782.55 on the National Stock Exchange.