Hero MotoCorp on Friday said its consolidated net profit increased by 51.3 per cent year-on-year to Rs 1,091.12 crore in the third quarter of 2023-24, driven by high demand for premium products, robust sales during the festival season, a decrease in commodity costs, and price hikes.
India’s largest two-wheeler maker also announced that it is going to invest up to Rs 600 crore to set up a second storage facility by March 2027 in Tirupati, Andhra Pradesh, to store components, accessories, and merchandise.
The company’s existing storage facility is in Neemrana, Rajasthan, and its capacity of 26,000 stock-keeping units (SKUs) has been fully utilised. The second storage facility will have the capacity of 36,700 SKUs. Hero MotoCorp said its focus on parts, accessories, and merchandise business has led to the business crossing annualised revenue of Rs 5,000 crore.
The company also declared an interim dividend of Rs 75 per share and a special dividend of Rs 25 per share for 2023-24, marking the centennial year of Chairman Emeritus Brijmohan Lall Munjal. The payment of dividends will be completed by March 9.
The company sold 1.46 million units of two-wheelers in the third quarter of 2023-24, which was 17.74 per cent more than in the corresponding quarter of the previous financial year.
“The overall revenue from operations for the quarter grew by 21 per cent to Rs 9,787 crore over the corresponding quarter of the previous year, aided by commodity cost, leap savings, premiumisation, and judicious price changes,” it mentioned. In comparison, the company’s total expenses increased by 16.9 per cent to Rs 8,619.64 crore in the third quarter.
Niranjan Gupta, Chief Executive Officer (CEO), Hero MotoCorp, said that the company’s recent launches in the premium segment have met with early success, and therefore, it is ramping up production capacity of its “upper premium” models.
Last month, Hero unveiled two premium motorcycles — the Xtreme 125 R and Mavrick 440. The company has received more than 13,000 bookings for the Karizma XMR motorcycle and has commenced deliveries of Harley-Davidson X400 in India. “We will keep fortifying our premium portfolio backed by strong brand building and the best in class ‘phygital’ customer experience. Moving forward, our margin shape will allow us to fuel our growth even more,” Gupta stated.
The company has expanded its EV showrooms to 100 cities in the country and is “rapidly” building the charging infrastructure in collaboration with Ather Energy. Hero holds about a 40 per cent share in Ather Energy, which manufactures electric scooters under its own brand. While Hero infused Rs 500 crore in Ather in the September quarter of this financial year, it did not infuse any money in the December quarter.
He said that the government’s emphasis on infrastructure development, while ensuring fiscal prudence in its recent interim budget, has created a conducive business and economic environment, which would facilitate higher growth and job creation.
First Published: Feb 09 2024 | 7:42 PM IST