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BW Businessworld

Hero MotoCorp Net Falls 10.7% As Expected

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Hero MotoCorp, India's largest motorcycle maker, posted a 10.7 per cent fall in its first-quarter profit, the fourth straight quarterly decline, as margin benefits from price increases were offset by sluggish sales volumes.

Hero reported a net profit of Rs 549 crore for the three months to end-June, compared with Rs 615 crore a year earlier. Net sales fell to Rs 6,127 crore from Rs 6,247 crore.

Analysts on average had forecast a profit of Rs 550 crore, according to Thomson Reuters I/B/E/S.

Hero's vehicle sales dropped 4 per cent in the domestic market during the quarter, hurt by fuel price increases and subdued economic growth, according to data from the Society of Indian Automobile Manufacturers.

Hero and its local rival Bajaj Auto Ltd are also facing increased competition from Honda Motor Co, which has been gaining ground in a market where two-wheelers account for the majority of passenger vehicles.