Hero Honda Q4 net zooms 49 pc on record sales

Riding on record sales,the countrys largest two-wheeler maker Hero Honda on Monday reported a 48.9 per cent jump in its net profit at Rs 598.8 crore for the quarter ending March 31.

Riding on record sales,the countrys largest two-wheeler maker Hero Honda on Monday reported a 48.9 per cent jump in its net profit at Rs 598.8 crore for the quarter ending March 31. During the period the companys revenue increased by 20.2 per cent to Rs 4,122.32 crore compared to the corresponding quarter of last year. The company declared a final dividend of 1,500 per cent equalling Rs 30 per share on each share of Rs 2.

However,going ahead the company is likely to face bumps in the form of higher interest rates,inflation and rising commodity prices like steel,aluminium and tyres,which could put pressure on margins. These factors will play a crucial role in the industry growth and profitability in the days to come, Hero Honda managing director and chief executive Pawan Munjal said in a statement.

Acknowledging that maintaining the current levels of profit margins in the coming quarters would be a big challenge,CFO Ravi Sud,however,ruled out any price raises in the near future,saying it had managed rising commodity costs through favourable contract negotiations with raw material suppliers.

Hero Honda aims to sell 5 million two-wheelers in the

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current fiscal,which is up 8.7 per cent from the 4.6 million it sold last year. However,analysts peg this as a conservative target and expect it to exceed that with double-digit growth. The company plans a capital expenditure of Rs 300 crore this fiscal,including Rs 130 crore to raise capacity to 5.7 million from the current 5.4 million,by August or September. For the full year (April-March,2010) Hero Hondas net profit was up 74.1 per cent at Rs 2,231.83 crore,while total revenue at Rs 15,860.51 crore was 28.1 per cent.

Though the company announced its results after the market closing hours,its shares fell 1.18 per cent to Rs 1,896.90. Its shares had risen 13.2 per cent in the March quarter,compared to a 0.4 per cent rise in the main index.