 "Hero Q2 profit beats St estimates, outperforms peers on volumes")
Hero MotoCorp, India’s largest two-wheeled vehicle maker, beat analyst estimates with a 9.2 percent rise in profit, the first gain in five quarters.
Net profit was Rs 481 crore for the fiscal second-quarter ended September 30 against expectations of Rs 463 crore.
Hero posted a net profit of Rs 441 crore in the same period a year ago.
Net sales rose 11 percent to Rs 5700 crore, compared with the estimate of Rs 5702 crore.
Sales in volume terms rose 6 percent from a year earlier, when the company reduced production to adjust its inventory.
Other income of two-wheeler maker rose a little over 16 percent on yearly basis to Rs 115 crore during September quarter.
[caption id=“attachment_731225” align=“alignleft” width=“380”]  Reuters[/caption]
The weakness in rupee caused rise in input cost during the quarter.
“The rupee depreciation has pulled up the cost of essential commodities such as steel, nickel, copper and rubber. Going forward, these higher input prices, combined with increasing labour cost, are likely to put a lot of pressure on margins in the industry. We will, therefore, be innovative in tackling these cost pressures to protect out margins,” the company said.
It expects cost savings of Rs 60-80 crore in October-March period of FY14 to aid margins.
Since its 2011 split from Japan’s Honda Motor Co, Hero has been investing heavily in technology and increasing exports, which were restricted under the terms of the 26-year joint venture.
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