Country’s largest manufacturer of motorcycles Hero Honda for the financial year’s Q2 ending September 30th 2009 rose by 94.9% to INR 597.14 crore when compared against the same period last year. A similar sharp surge came in the first quarter ending June when net profit rose by 83% to INR 500.11 crore.
Its total sales for July to September rose by 26.8% to INR 4,040.1 crore. Earnings before interest and taxes on a year on year basis for the quarter rose by 78.7% to INR 693.8 crore. The company attributes the healthy earnings to a mix of softening raw material prices in the last quarter in which prices dipped by around 450 basis points, depreciation and the effective taxation rate at the Haridwar plant
Analysts said that while this is in line with expectations, net profit has surpassed estimates. Mr Vaishali Jajoo a analyst at Angel Broking said that “The net profit at INR 597.14 crore has been aided by many factors, including the record sales of over a million units sold in the second quarter.”
Mr Ravi Sud CFO of Hero Honda said that “Last year, our effective tax rate at the Haridwar plant was 28%. For the last quarter ending September 2009, it stood at 22.31%.
