Hero Honda Q4 Profit Down by 2%

MUMBAI, India (April 14) -India's top motorcycle maker, Hero Honda Motors Ltd reported a 2% fall in quarterly profit as sales continued to grow in the world's number two bike market but higher input costs weighed on margins. Hero Honda, known for sturdy, fuel-efficient PTWs like the Splendor, has driven a motorcycle boom in India, helped by rising incomes, new model launches and a shift in preference to bikes from scooters. But rivals are launching new models that threaten its market share of a market for nearly 5 million bikes a year, second only in size to China's. Hero Honda, in which India's Munjal family which also owns the world's biggest bicycle company, and Japan's Honda Motor Co each hold 26% stakes, said net profit fell to 2.07 billion Rupees/ € 36 million in the fiscal fourth quarter. "The top line is broadly in line with expectations, but the bottom line has taken a hit from input prices and competition," said Kalpesh Parekh, a senior analyst at ASK Raymond James. Motorbike sales at the firm rose 15.6% in the January-March quarter to 685,419 units, ahead of industry growth of nearly 14% but lagging rival Bajaj Auto's 22% surge. Indian vehicle makers have been hit in the past year by an increase in prices of raw materials like steel and plastics, while a cutthroat market has prevented them from passing on the cost increases to consumers. (MH)