Hero MotoCorp Q1 net profit rises 33 per cent to Rs 750 crore

Two-wheeler market leader Hero MotoCorp on Monday reported a 33.33 per cent rise in net profit at Rs 750.34 crore for the first quarter ended June 30, riding on new product launches and strategic marketing initiatives. The company had posted a net profit of Rs 562.76 crore in the same period of the previous fiscal.

Net sales of the company, however, declined by 2.04 per cent for the first quarter at Rs 6,855.98 crore as against Rs 6,999.40 crore in the year-ago period, Hero MotoCorp said in a statement.

"During the first quarter of FY16 we continued to strengthen our market leadership through a combination of new product launches and strategic marketing initiatives," Hero MotoCorp Ltd Chairman, CEO and MD Pawan Munjal said. "The company expanded its product range with two new offerings - the Xtreme Sports and Passion Pro - during the quarter," he added.

"These products have witnessed a very positive response, enabling us to fortify our leadership position. Strong demand for our products in the 125cc category has also been instrumental in driving volumes," Munjal said. He added that the company has further lined up a slew of new launches including scooters and motorcycles.

Commenting on the market, Munjal said, "We expect the industry to move in an upward trend in the coming quarters although a lot will depend on multiple factors, including good monsoon, rural income and overall market sentiments."

During the period under review, the company sold 16,45,867 two-wheeler units, down 4.04 per cent compared with 17,15,254 units during the same period of previous fiscal. The company said its board, which met on Monday, has accorded consent for the company to become a direct party to the settlement agreement (in relation to the bankruptcy filing of Eric Buell Racing), which was executed on July 27.

Hero MotoCorp had announced that it will acquire certain assets of Eric Buell Racing for $2.8 million as part of a settlement agreement with court-appointed receiver in the bankruptcy matter of the US-based company. The settlement agreement was signed between HMCL (NA) Inc and HMCL Americas Inc - both entities of Hero MotoCorp Ltd (HMCL) - and the receiver appointed by the Circuit Court, Wisconsin, US, in the bankruptcy matter filed by Erik Buell Racing (EBR) and Erik Buell LLC.

As informed earlier, the Settlement Agreement will be, inter alia, contingent upon its approval by the Circuit Court, the company said.