Riding on record million unit sales, Hero Honda, the world’s largest two-wheeler manufacturer, has reported its best ever quarterly earnings of all time. The company posted a net profit at Rs 500.11 crore, a rise of 83 per cent from Rs 272.87 crore in the corresponding period of the last year.
The company first time crossed its product sales surpassing one million mark at 11,18,987 units of two-wheelers thereby, generating a turnover of Rs 3822.44 crore, a rise of 34 per cent over Rs 2,851.04 crore in the corresponding period last year. The EBITDA margin of 17 per cent in the first quarter is a recorded high from the level of 12.23 per cent in the comparable quarter of the previous fiscal.
With over 59 per cent market share in the domestic motorcycle market and with sales of over a million units in the quarter, the robust topline growth has largely contributed to the strong bottomline performance. Several other key factors such as cost rationalisation across the board, softening of commodity prices, and tax benefits also contributed to the bottomline. The current quarter reflects a substantial tax benefit accrued on account of the company’s full utilisation of the tax benefits available for the Haridwar plant, which resulted in bringing down the overall tax rate.
The consistent robust topline performance has been driven by volume growth across segments and markets, aggressive brand building initiatives and rapid network expansion, reflecting the strong brands and continued expansion of new markets.
Most of the recent launches such as Passion Pro, Splendor NXG self-start, the special edition Hunk, the new Pleasure, in addition to the trusted Splendor plus and Passion Plus, have been share-and-volume drivers for the company. Hunk and CBZ X-treme continue to help build on Hero Honda’s steadily growing share in the premium segment.
