Hero MotoCorp, the world's largest two-wheeler manufacturer, on Tuesday reported 38.28 per cent year-on-year growth in its net profit at Rs 1,257 crore for the first quarter ended June 30, 2019, led by a one-off exceptional gain of Rs 737.50 crore from the reversal of a national calamity contingent duty that the company paid for its Haridwar plant.
"The auto major had posted a net profit of Rs 909 crore in the same quarter last year," Hero MotoCorp said in a filing to the Bombay Stock Exchange.
Hero MotoCorp's revenue from operations declined by 8.85 per cent to Rs 8,030 crore in Q1FY20 versus Rs 8,810 crore in Q1FY19. EBITDA (Earnings before interest, tax, depreciation and amortisation) margin expanded to 14.4 per cent in Q1FY20 sequentially from 13.6 per cent in the March quarter, the company said.
The other income of the company nearly doubles to Rs 218.83 crore as against Rs 115.73 crore in the year ago fiscal.
"The overall economic and customer sentiments continued to be soft during the first quarter of this fiscal and their impact is clearly visible in the performance of the auto sector. The outlook for the rest of the year will be dependent on multiple factors, including the progress of monsoon and festive season off take, as well as improvement in liquidity. Given the dependence of multiple sectors and millions of jobs on auto industry, it is imperative for the government to take urgent steps to boost consumption," said Niranjan Gupta, Chief Financial Officer, Hero MotoCorp.
Gupta said that the company has reiterated its appeal to the government to bring down the Goods and Services Tax (GST) on two-wheelers to 18 per cent from the current level of 28 per cent, to provide the much-needed relief to the sector. "A reduction in GST will lower the cost of the two-wheeler and spur demand, with the consequent growth in volumes offsetting any impact on the government revenue," he said.
During the quarter under review, the company sold a total of 18,42,920 vehicles. The company has appointed Yerry Mina, the popular Colombian footballer, as its new brand ambassador, it said.
During April-June period, Hero MotoCorp launched three next-gen motorcycles for markets around the world - including in India - the XPulse 200, the XPulse 200T and the Xtreme 200S. To further strengthen its presence in the scooter segment, the company introduced two powerful and stylish new scooters - Maestro Edge 125 and Pleasure+ 110, it added.
Ahead of Q1 results, shares of Hero MotoCorp ended trade at Rs 2,259.35 apiece, down 6.01 per cent, on the BSE.
Edited by Chitranjan Kumar