Hero MotoCorp, one of country’s largest two-wheeler makers, on Thursday posted a 4.5% decline in standalone profit after tax to ₹769.1 crore for the third quarter ended December 31.
The company has registered profit after tax of ₹805.43 crore in the year-ago quarter. Sequentially, PAT is down 21% from ₹976.28 for the quarter ended September 2018.
Total income from operations, however, rose 8.46% to ₹8,052.46 crore against ₹7,424.23 crore in the same period last fiscal. This was on the back of a 5.3% growth in sales for the third-quarter to 17,98,905 two-wheeler units.
Stating that there had been “temporary setbacks” in the third quarter of the current fiscal on account of multiple factors, leading to higher than normal inventory levels at dealerships, Pawan Munjal chairman, Hero MotoCorp, said the domestic two-wheeler industry had significant headroom to grow, given the penetration of two-wheelers in India is still quite low.
“…the fourth quarter has historically been positive and we look forward to an improved market situation in the coming months. Hopefully, the upcoming Budget will have enough impetus for the agriculture and social sectors to trigger a positive turnaround in the sentiments,” he added.
The company’s board had also approved an interim dividend of ₹55 per share.
During the October-December quarter, the company’s expenses stood at ₹6,914.04 crore, up 9.81% year-on-year, mainly on account of increased commodity and finance costs.
Hero MotoCorp added that it had appealed against an income tax demand of ₹2,336.71 crore (including interest), pertaining to re-assessment of Hero Investments Private Limited’s income for FY 2010-11, received during the quarter.
“The re-assessment was done despite full disclosure at the time of original assessment. The demand has been raised on the company, as HIPL got amalgamated with the company w.e.f. January 1, 2013,” it said, adding that based on expert legal opinion, in view of the management, the demand order was not sustainable.
