Hero Honda sales up, profits down in 2006-07

Hero Honda Motors sold 33,36,756 units in the financial year 2006-07, which is an increase of 11.2 percent over last fiscal's tally of 30,00,751 units. The company has steadily improved its market share over the year, exiting with 49.2 percent share in motorcycles for the month of March 2007.

Hero Honda launched as many as eight new products including variants during the year and invested significantly in brand building and supporting these launches. This, coupled with consistently rising input material costs of steel, aluminum, nickel etc, has meant a lower EBIDTA margin of 11.85 percent. Its net profit (after tax) stood at Rs. 857.89 crores.

“A multi-pronged strategy involving new launches, supported by aggressive 360 degrees communication, saw a steady sales growth throughout 2006-07. The financial year also saw the laying of foundation stone of our new plant in Haridwar, Uttarakhand, which will commence operation by the middle of this year,” said chairman, Brijmohan Lall.

"This strategy has worked, and so we will continue to focus on topline growth and market share. However, as we have always maintained, our margins this year will continue to be under pressure due to inflation in material costs, coupled with spends on marketing initiatives for brand building," added managing director & CEO, Pawan Munjal.