Hero Honda posts record sales, 83 per cent surge in Q1 profits
30 Jul 2009
Riding on a record million-unit sales, Hero Honda Motors Ltd, the world's largest two-wheeler manufacturer by sales, has reported its best ever quarterly earnings of all time. The company posted a net profit of Rs500.11 crore for the quarter ended 30 June, an increase of 83 per cent from Rs272.87 crore in the corresponding period last year.
Lower input costs and new high-end models that rolled out from its factory in Uttarakhand, the hill state where it enjoys tax benefits, helped boost the bottom line, the company announced on Wednesday.
Hero Honda crossed the million-unit sales mark for the first time during the quarter, registering sales of 11,18,987 units of two-wheelers, generating a turnover of Rs3,822.44 crore, a rise of 34 per cent over Rs2,851.04 crore in the corresponding period last year.
The EBITDA margin of 17 per cent in the first quarter is again a recorded high, up from 12.23 per cent in the previous year's quarter. With an over 59 per cent share in the domestic motorcycle market and with sales of over a million units in the quarter, the robust top line growth has largely contributed to the strong bottom line, the company said.
Several other factors such as cost rationalisation across the board, softening of commodity prices and tax benefits also contributed to the bottom line. The current quarter reflects a substantial tax benefit accrued on account of the company's full utilisation of the tax benefits available for its Haridwar plant in Uttarakhand.
The company's recent launches like the Passion Pro, Splendor NXG self-start, the special edition Hunk, the new Pleasure, added to the trusted Splendor plus and Passion Plus, have been share-and-volume drivers for the company. Hunk and CBZ X-treme continues to help build on Hero Honda's steadily growing share in the premium segment, the company said.
