Hero MotoCorp, the world's largest manufacturer of motorcycle and scooters, has reported net profit of Rs 365 for Q1 FY2022 (April-June 2021). This constitutes 498% year-on-increase, albeit the year-ago situation was one badly impacted by the beginning of the pandemic.
Riding on sales of 10.25 lakh units of motorcycles and scooters during the quarter despite Covid-19 related disruptions, the company reported total revenues of Rs 5,487 crore (vs Rs 2,972 crore in Q1 FY2021).
In April 2021, Hero MotoCorp had suspended manufacturing operations temporarily at all of its manufacturing facilities across the country, including its Global Parts Center (GPC) in Neemrana and its R&D facility – the Centre of Innovation and Technology (CIT), Jaipur due to the second wave of Covid-19 pandemic. The company resumed production at its manufacturing plants in India in a staggered manner from May 17, 2021.
Q1 FY2022 saw the first official confirmation of Hero MotoCorp’s new and strong focus on electric mobility. On April 21, the company announced a strategic partnership with Gogoro Inc to accelerate the shift to sustainable electric mobility in India. The two companies will set up a battery swapping JV to bring Gogoro’s battery swapping platform to India. In addition, Hero MotoCorp will launch EVs using Gogoro’s technology. Hero MotoCorp will be the majority partner in the JV.
Commenting on the Q1 performance, Niranjan Gupta, Chief Financial Officer, Hero MotoCorp, said, “The first quarter of this fiscal has been adversely impacted by Covid-19. Despite the challenges posed by the pandemic, Hero MotoCorp achieved significant growth in both earnings and profitability compared to the corresponding quarter of the previous fiscal. The company improved its market share in the quarter by more than 200 bps over the full year of FY 21.
“The commodity costs continued to rise, thereby impacting the industry margins. We have taken judicious and measured pricing decisions, reducing the impact on the customers by offsetting part of the increase through the accelerated Leap-2 saving program. The company remains optimistic about demand over the coming months with the start of the festive season and also a healthy monsoon and encouraging farm activity. With last-mile retail opening up further, we expect numbers to be positive as we move forward.”
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