India’s largest two-wheeler manufacturer, Hero Honda posted a profit of Rs 402.2 crore during the quarter ended 31st March 2009. This figure represents a 35% increase over the Rs 298.7 crore in profits, which the company earned in the year-ago period.
Hero Honda’s sales for the quarter stood at Rs 3,411.8 crore, a 22.34% increase over sales of Rs 2,788.65 crore which the company netted in Q4, FY 2007-08.
According to Hero Honda, a high percentage of its sales come from rural and semi-urban areas, where customers tend to buy vehicles on full cash down basis rather than opt for bank loans or finance schemes. Hence, sales haven’t been severely affected by the ongoing credit crunch.
Hero Honda has also implemented significant cost-cutting measures, hence boosting profitability, and the company also benefited from tax savings due to the location of its newest factory near Haridwar, in Uttarakhand. Finally, the fact that steel and aluminium prices have come down also helped the company in lowering overall cost of production, increasing the company’s profit margins in the process.
Hero Honda earned Rs 12,319.12 crore during 2008-09, a 19.2% growth over the year-ago figure. The company’s net profit for FY 2008-09 stood at Rs 1,281.8 crore, a 32.4% increase over its profits in the previous financial year.
Between the 1st of April 2008 and the 31st of March this year, Hero Honda sold 3.7 million units (including domestic sales and exports), a 12% growth over sales in the year-ago period. The 12% growth is especially significant in light of the fact that the entire two-wheeler industry in India grew by only 3% in the same period.
[Via: indiaautomotive]
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