Hero Honda Q4 net rises 29 per cent

Hero Honda, the world's largest motorcycle manufacturer, has managed to modestly improve operating margins for the fourth quarter as cost of inputs expanded at a moderate rate. The company may face strong margin pressures in future as metal prices have gone up and competition has increased in the motorcycle segment.

For the fourth quarter ended 31 March 2006, Hero Honda's net profits have increased 29 per cent to Rs267.19 crore from Rs207.11 crore for the previous year quarter. Total revenues for the quarter increased 16.34 per cent to Rs2,298.91 crore from Rs1,976.09 crore.

Operating profits for the quarter increased 23.86 per cent while operating margins improved to 13.91 per cent of net sales from 13.09 per cent. Other income went up by 20.33 per cent during the quarter.

Input and manufacturing costs for the quarter increased at a lower than expected 12.9 per cent while staff costs went up by 12.63 per cent. Other expenses were higher by 28.7 per cent. Depreciation costs for the quarter increased by 15.64 per cent.

For the full year 2005-06, net profits increased 19.85 per cent to Rs971.34 crore, or Rs48.64 per share, from Rs810.47, or Rs40.59 per share, crore for the previous year. Full year revenues increased 17.24 per cent to Rs8,866.71 crore from Rs7,562.68 crore.

Other income increased modestly by 8.3 per cent during the year to Rs152.73 crore from Rs141.03 crore.