Hero MotoCorp’s reports highest-ever Q2 net profit at Rs 763 crore

Hero MotoCorp has reported a net profit after tax (PAT) of Rs 763 crore in the second quarter of fiscal 2014-15 (July-September 2014). This is indicative of a 58 percent growth year-on-year as compared to Q2 2013-14’s PAT of Rs 481 crore, and is the highest ever quarterly profit for the company in over 30 years of manufacturing operations. Thus far, its highest quarterly net profit was in June-August 2012 with a PAT of Rs 615 crore.

The company also benefitted from the stoppage of paying of royalty to erstwhile partner Honda Motor Co from June 30 and saved around Rs 150 crore in the second quarter.  

The manufacturer sold a total of 16,92,523 two-wheelers in Q2, FY’15 and registered a total turnover (net sales and other operating income) of Rs 6,915 crore. EBIDTA margin (Earnings Before Interest, Depreciation & Amortisation) for the second quarter of this financial year stood at 13.52 percent.

In an exclusive interview to Autocar India, Autocar Professional’s sister magazine last month, In a press note, Pawan Munjal, vice-chairman, CEO and MD, had said: “We are back to double-digit growth and the momentum is with us. In fact, we have not only maintained our leadership, we have further consolidated it. So it only proves that whatever we have been doing, we have been doing it right. Going forward, we will keep doing the same – bring new products with cutting-edge technology and value-added features, expand our distribution network, and engage with the customer through innovative communication.”  

In yesterday’s press note, Munjal said: “The Splendor iSmart with the path-breaking i3S technology, Pleasure scooter with the Integrated Braking System (IBS) and the new ZMR and Karizma R have all been driving large volumes.”

Hero MotoCorp has been aggressively making moves on various fronts, both product-wise and technology-wise. In September, SIAM data reveals that it sold 580,882 two-wheelers and a total of 3,311,522 in the April-September 2014 period. It is banking of bigger sales numbers during the ongoing festive season and has recently rolled out two 100cc variants – the café racer styled Splendor Pro Classic at Rs 48,650 and Passion Pro TR at Rs 51,550 (both prices, ex-showroom Delhi).

Since its breakaway with Honda in December 2010, Hero MotoCorp has gone about beefing up its technology and R&D strengths in various ways. On October 13, IT officially announced the appointment of globally renowned automotive technology expert Dr Markus Braunsperger as the Chief Technology Officer (CTO). Last year it brought in Markus Feichtner to lead the newly-created division of ‘Engine Design & Development’. Feichtner came from well-known engine specialist, Austria-headquartered AVL, where he was the executive director of AVL’s India Technical Centre, based out of Gurgaon.

Hero is also fast expanding its global footprint and has recently launched sales operations in Colombia and Bangladesh. According to Munjal, “With the plants in Colombia and Bangladesh slated to start production sometime in 2015-16, we will have a total installed capacity of 12 million units well before 2020.”