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Hero Honda's Q4 net profit up 34.64 % & total sales up 13 % Print E-mail
Written by Vijay   
Friday, 24 April 2009
Mumbai: India’s largest two wheeler manufacturer, Hero Honda Motors Ltd, has posted  12 per cent growth in sales volumes in FY’09. Selling 37.22 lakh two-wheelers during FY09, Hero Honda’s total turnover (Net sales & Other Operating income) grew to Rs 12356.88 crores,  a growth of 19.22 per cent over Rs.  10364.54 crores recorded over the last fiscal.

The company's financial results for Q4 reported a net profit increase of 34.64 per cent and a total sales increase of 13 per cent, three times that of the industry growth during the period.

The company has recorded an EBIDTA margin of 14.16 per cent in this fiscal. The EBIDTA margin in the previous year (07-08) was 13.33 per cent. HHML will pay a dividend of Rs.20 per share on the strength of the operations and the resultant strong financial position.

With EBIDTA margin(earnings before interest, taxes, depreciation and amortization)  for the quarter standing at 16.04 per cent the company's total turnover for Q4 alone showed an increase of 22.24 per cent.

According to reports, the company will be investing Rs 350 crore this fiscal for capacity expansion and modernization. The company’s facilities in Haridwar, Dharuhera and Gurgaon would be modernized and expanded to take the company's overall production and sales targets for 2009-10 to over four million units.

Mr. Pawan Munjal, MD & CEO, Hero Honda Motors Ltd said, “FY’09 – our 25th Year – has been a path-breaking year for us. We continue to set new benchmarks even as recessionary trends and sluggish market situation afflict firms across the globe. We grew at 12 per cent during FY’09 even as the industry grew by mere five per cent. Our Q4 volumes growth – 13 per cent - was more than three times that of the industry growth of four per cent during the period. The dividend payout is in recognition of the company’s strong financial performance and is indicative of the Board’s confidence in the company’s strategic direction. With more than 57 per cent share in the domestic motorcycle market, we are in the strongest position in the company's history.

“This robust top line growth, combined with our operating margins, revenue trends and industry-leading growth is reflective of the winning strategy that we continue to execute with precision. The strategy is driven by innovation in every sphere of our activity, and we will build on this path to keep up the growth momentum in the new financial year as well,” he added.

Fiscal 2008-09 saw Hero Honda launch nine models across segments. The 100cc models continue to dominate the overall two-wheeler market  at 64%, followed by 125-150 cc at 22% and the remaining 14%  by bikes with an  engine capacity of 150 cc and above. There has been an increase in demand for bikes in semi urban and rural areas and four of every 10 bikes sold by Hero Honda are being bought by customers in smaller towns and villages.

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