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Hero Motocorp’s Q4 results dive 13.9 per cent

Team OD  /
12 May 2017 12:38:17 IST

Hero MotoCorp posted its Q4 results recently and as expected net profit has taken a big hit. The company posted a net profit of Rs 717.8 crore, which is down from Rs 833 crore, on a year-on-year basis. That's a 13.9 per cent decline.

The drop can be attributed to severe challenges that the company faced during this quarter. Demonetisation has taken a toll on the company's sales, and the company posted a 6 per cent drop in sales in this quarter alone.

Mr Pawan Munjal CMD Hero MotoCorp at the Brand Launch and Global Launch of Glamour in Argentina

The second challenge it faced is ban on BS-III compliant two-wheelers which hit the company hardest. The company was sitting on a stockpile of 2,50,000 units and had to offer heavy discounts to ensure the bikes were sold before the March 31, 2017 deadline. That took a major toll on revenue, amounting to Rs 193 crore.

The EBITDA too fell by 19.5 per cent, down to Rs 957.6 crore from Rs 1,189.1 crore, calculated on a year-on-year basis. Hero MotoCorp said that the impact on margins was a one-time incident owing to the above reasons. The results are not a surprise and in line with expectations.

That said, the company says that it is positive about the future and is investing heavily into its new product line-up. Plans are to invest Rs 2,500 crore until FY19.

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