India's largest two-wheeler manufacturer, Hero MotoCorp reported a four-times increase in consolidated net profit during April to June 2021 despite COVID-19 related disruptions, the company said in a statement. Riding on sales of 10.25 lakh units of two-wheelers during the quarter, Hero MotoCorp reported Rs. 365 crore net profit during April to June 2021, as against just Rs. 61 crore in the same period a year ago. The company reported revenue from operations of Rs. 5,487 crore during the first quarter of the current financial year, a 85 per cent growth, compared to Rs. 2,972 crore in the same quarter a year ago.
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In April 2021, Hero MotoCorp had paused operations temporarily at all of its manufacturing facilities in India, including its R&D facility, the Centre of Innovation and Technology in Jaipur.
Hero MotoCorp said that in April 2021, the company had roactively paused its operations temporarily at all of its manufacturing facilities across the country, including its Global Parts Center (GPC) in Neemrana and its R&D facility - the Centre of Innovation and Technology (CIT), Jaipur due to the second wave of COVID-19 pandemic. The company resumed production at its manufacturing plants in India in a staggered manner from May 17, 2021. Overall sales volumes of motorcycles and scooters during the April to June quarter stood at 10.25 lakh units, a growth of 81 per cent over the corresponding quarter in the previous fiscal (April to June 2020). It should be noted however, that last year, there were widespread lockdowns during the first quarter, which had led to low sales volumes across the industry.
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The Hero Splendor + is India's highest-selling motorcycle
Nearly half of the first quarter FY'22 witnessed significant disruptions triggered by localised lockdowns imposed by various state governments and authorities across the country in the wake of escalating coronavirus cases, thereby restricting movement of logistics and dampening customer sentiments, the company statement said.
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Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp, said, "The first quarter of this fiscal has been adversely impacted by COVID-19. Despite the challenges posed by the pandemic, Hero MotoCorp achieved significant growth in both earnings and profitability compared to the corresponding quarter of the previous fiscal. The company improved its market share in the quarter by more than 200 bps over the full year of FY 21.The commodity costs continued to rise, thereby impacting the industry margins. We have taken judicious and measured pricing decisions, reducing the impact on the customers by offsetting part of the increase through the accelerated Leap-2 saving program.
"The company remains optimistic about demand over the coming months with the start of the festive season and also a healthy monsoon and encouraging farm activity. With last-mile retail opening up further, we expect numbers to be positive as we move forward. Hero MotoCorp aims to build further on its market leadership as we continue to delight customers with superior products and technology."
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Dr. Pawan Munjal with the upcoming Hero electric scooter which is expected to use Taiwan's Gogoro network technology.
During the first quarter of the current financial year, Hero MotoCorp also strengthened its global business, and announced a strategic partnership with Taiwan's Gogoro, to accelerate the shift to sustainable electric mobility in India. The joint venture will bring Gogoro's industry leading battery swapping platform to India, and collaborate on electric vehicle development to bring Hero branded electric vehicles to the market, powered by Gogoro network.
