In keeping with investor and analyst expectations, Hero Honda Ltd, the country's largest motorcycle maker, today reported a 30.7 per cent increase in net profit for the first quarter ended June 30 at Rs 78.81 crore against Rs 60.30 crore registered during the corresponding April-June period last fiscal.
The company's sales turnover for the quarter also improved around 31 per cent at Rs 951.99 crore (net of taxes) against last year first quarter revenues of Rs 728.26 crore.
At the Bombay Stock Exchange, shares of the company jumped 7.4 per cent to Rs 153.85 before the unaudited results were announced in the evening here today after a meeting of the board of directors.
Analysts had forecast an over 30 per cent growth for the company, both in terms of profits and sales revenue for the quarter, basing their reports on growing sales of motorcycles in the domestic market.
As expected, Hero Honda has also registered a volume growth of 28 per cent during the quarter, notching up an over 50 per cent share of the domestic market.
A company release said the first quarter profit before tax (PBT) increased from Rs 91.75 crore to Rs 121.76 crore, a growth of 33 per cent.
The company sold 3,06,930 motorcycles in the first quarter of 2001-02 compared with 2,39,542 motorcycles in the first quarter of 2000-01, a growth of 28 per cent. Industry growth during the same period is estimated at around 22 per cent.
The volume market share in the two-wheeler industry showed an impressive jump to 32 per cent, up from 26 per cent in the corresponding quarter last year.
The operating margin of 12.52 per cent in the first quarter is a substantial increase from 10.68 per cent in comparative quarter last year.
"This is the result of a very focused approach on cost rationalisation and all-round improvement in productivity," Pawan Munjal, director and chief executive officer, Hero Honda, said.
Munjal was also very positive about the future growth. He said, "Motorcycles today account for 65 per cent of the total two-wheeler segment and their share is still increasing. Our target is to sell 12.5 lakh motorcycles this year. We shall invest about Rs 100 crore to increase capacity. We shall continue to take full advantage of the growing preference for motorcycles in the country."
Hero Honda's two offerings 'Splendor' and 'Passion' are the largest selling models in the country, the company said.
The company is also the largest volume seller among all Honda two-wheeler joint ventures in the world.
