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Hero MotoCorp net profit falls 5 percent; sales hurt

Source : REUTERS
Last Updated: Fri, Apr 26, 2013 10:40 hrs
An employee speaks to a customer inside a Hero MotoCorp showroom in Mumbai

Hero MotoCorp said quarterly profit fell 4.9 percent, its third straight quarter of profit decline, as sales growth slowed amid rising competition that has dented its market share.

The country's largest motorcycle manufacturer beat street estimates for the first quarter in six, reporting net profit of 5.74 billion rupees for the three months to end-March.

Analysts had produced an average net profit forecast of 4.98 billion rupees, according to Thomson Reuters I/B/E/S.



Net sales rose 1.8 percent to 60.72 billion rupees, though sales of vehicles fell 2.8 percent.

Since splitting from Honda Motor Co Ltd (7267.T) in 2011, Hero has been forced to invest heavily in its design and technology divisions, as well as contend with increased competition from its former partner and other Japanese manufacturers Yamaha Motor Co Ltd and Suzuki Motor Corp.

Sales of motorcycles in India were flat in the financial year just ended as hikes in fuel prices and subdued economic growth dampened demand, but they are forecast to rise between 6 and 8 percent in the current year, according to an industry body.

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