Hero Honda Q2 net profit falls, margins hit

Hero Honda Motors Ltd has announced the following Unaudited results for the quarter ended September 30, 2006:

The Company has posted a net profit after tax of Rs 2159.70 million for the quarter ended September 30, 2006 as compared to Rs 2379.20 million for the quarter ended September 30, 2005. Total Turnover (net of excise) has increased from Rs 22093.60 million for the quarter ended September 30, 2005 to Rs 22894.40 million for the quarter ended September 30, 2006.

Further the Company has informed that, Mr. Sunil Kant Munjal has been appointed as a Non-executive Director in the casual vacancy caused due to the resignation of Mr. Satyanand Munjal, Non-executive Director w.e.f. October 25, 2006.

According to Mr. Pawan Munjal, Managing Director, of the Company, "Hero Honda continues on its planned growth path. The launch of the four new models will positively impact our topline growth. The Company has increased investments in brand building which will help the Company achieve long term market growth and further consolidate its leadership position."

Commenting on the same, Mr. Munjal said, "the impact on operating margins has been due to increased inflationary costs in raw materials - steel, aluminum and rubber etc. The Company has significantly countered this increase in raw material cost through improved efficiencies in production and cost management", he added.

Source : Equity Bulls

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