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Hero MotoCorp's profit grew 23.2% in Q3FY21 to Rs 1,084 crore

Hero MotoCorps profit grew 23.2% in Q3FY21 to Rs 1,084 crore
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Hero MotoCorp's profit grew 23.2% in Q3FY21 to Rs 1,084 crore

Highlights

Hero MotoCorp Ltd, country’s largest two-wheeler manufacturer, on Thursday reported a 23.2 per cent year-on-year increase in net profit to Rs 1,084 crore

Hero MotoCorp Ltd, country's largest two-wheeler manufacturer, on Thursday reported a 23.2 per cent year-on-year increase in net profit to Rs 1,084 crore for the quarter ending December 31, 2020, as sales of its motorcycles and scooters improved on a low base of the year and rise in demand for entry-level motorcycles in the rural and semi-urban markets. It had reported a net profit of Rs 880 crore in the corresponding quarter last year as sales took a hit due to economic slowdown and transition to new safety and emission norms.

The New Delhi-based automaker's revenue from operation grew 39.7 per cent to Rs 9,776 crore against Rs 6,997 crore posted in the same period in the last financial year 2019-20.

Despite an increase in the overall cost during the quarter, Hero MotoCorp's EBITDA or operating profit grew by 36.1 per cent to Rs 1,414 crore from Rs 1,039 crore. The margin remained almost flat at 14.5 per cent in Q3FY21 against 14.8 per cent posted in Q3FY20.

The company in a statement has said that it has recorded the highest ever revenue for any quarter. This has been possible, thanks to the robust sales volume during the quarter and a combination of key strategic initiatives such as cost reduction efforts to partially offset the impact of the commodity costs and intense operational efficiencies.

It added, input costs to remain under pressure due to the rising prices of commodities and fuel. The company will continue to focus on driving cost savings and take judicious price increases.

The Board of Directors has declared an aggregate dividend of Rs 70 per share (Interim dividend of Rs. 65 per equity share and a special interim dividend of Rs 5 per equity share).

In a regulatory filing, Hero MoytoCorp said, "The board has approved an interim dividend @3250 per cent i.e. Rs. 65 per equity share (face value of Rs. 2 per equity share) for the financial year 2020-21. Further, the Board has also declared a special interim dividend of Rs.100 crores @250 per cent i.e. Rs. 5 per equity share, to mark the achievement of historic milestone of achieving 100 million cumulative productions of two-wheelers, taking the aggregate interim dividend declared to 3500 per cent i.e. Rs. 70 per equity share." It added, Accordingly, the Board has fixed February 16, 2021, as the record date for determining entitlement of members for the purpose of payment of interim dividend. The payment of interim dividend/ dispatch of dividend warrants will be completed by March 6, 2021."

On January 21, 2021, Hero MotoCorp surpassed the monumental milestone of 100 Million (10 Crores) units in cumulative production. The 100 millionth motorcycle, the Xtreme 160R, was rolled-out of the Company's manufacturing facility in Haridwar, in the northern Indian hill state of Uttarakhand.

Mr. Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp, said "Our performance in the third-quarter underlines Hero MotoCorp's operational strength and ability to perform well despite a challenging and volatile environment. The company has been able to drive profitable growth through improvement in market shares, acceleration of Leap-II savings initiatives, continued control on overheads, and cash flow management. We continue to build on our strong portfolio with the launch of special edition variants to commemorate the milestone of 100 million units in cumulative production.

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