Hero MotoCorp reported a 23.7 per cent increase in its quarterly net profit to ₹ 1,084.47 crore during the period from October to December 2020 on the back of strong sales volume. Hero's net profit in Q3 a year ago was ₹ 880 crore. The company's revenue from operations for the third quarter stood at ₹ 9,776 crore, posting 39.7 per cent growth over ₹ 6,997 crore in the same period a year ago. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹ 1,414 crore, compared to ₹ 1,039 crore in the same period a year ago.
According to the company, the strong quarterly numbers have been possible because of robust sales volumes during the quarter and a combination of key strategic initiatives such as cost reduction efforts to partially offset the impact of commodity costs and intense operational efficiencies.
"Our performance in the third quarter underlines Hero MotoCorp's operational strength and ability to perform well despite a challenging and volatile environment. The company has been able to drive profitable growth through improvement in market shares, acceleration of Leap-II savings initiatives, continued control on overheads, and cash flow management. We continue to build on our strong portfolio with the launch of special edition variants to commemorate the milestone of 100 Million units in cumulative production," said Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp.
"Going forward, we expect input costs to remain under pressure due to the rising prices of commodities and fuel. The price increase on our range of products that we undertook from January 1 will partially offset these cost pressures. We will continue to focus on driving cost savings, and take judicious price increases if and when necessary.
"With the International Monetary Fund (IMF) projecting a strong recovery in India's economic growth rate in FY 21-22, we remain optimistic about the prospects of personal mobility and consumer demand. Hero MotoCorp is confident to make the most of this economic spur on the back of new launches of exciting products and our strong brand equity with customers across markets," he added.
During the quarter, Hero MotoCorp recorded the highest-ever monthly sales in October 2020, with 8,06,848 units. The company retailed more than 1.4 million units of two-wheelers during the 32-day festive season during the quarter. Hero MotoCorp also entered into an alliance with Harley-Davidson during the quarter. Under the new partnership, Hero will develop and sell a range of premium motorcycles under the Harley-Davidson brand name, and will also offer sales and service of Harley-Davidson motorcycles in India. Harley-Davidson parts, accessories, riding gear and apparel will be sold by Hero through a network of brand-exclusive Harley-Davidson dealers, as well as Hero's existing dealership network in India.