Date:31/01/2006 URL: http://www.thehindubusinessline.com/2006/01/31/stories/2006013100730200.htm

Back Hero Honda Q3 net up on higher sales, cost rationalisation

Our Bureau

New Delhi , Jan. 30

TWO-wheeler major Hero Honda reported a 19.5 per cent rise in net profit for the quarter ended December 31, 2005, at Rs 261.7 crore against Rs 218.9 crore in the same period last fiscal. The improvement in profitability was helped by higher sales coupled with cost rationalisation measures.

The company's total turnover grew 15 per cent to Rs 2,351 crore in the quarter from Rs 2,043 crore in October-December 2004.

``Operating margin for the third quarter stood at 16.3 per cent against 15.5 per cent in the previous corresponding period, reflecting the company's continued success in rationalising costs, in spite of rising input costs, through prudent working capital management, increasing manufacturing efficiency and soaring sales volume,'' a company release said.

Sales in the October-December 2005 quarter grew 12 per cent to 7.98 lakh units against 7.12 lakh units in the same quarter last fiscal.

``Despite rising input costs right from the beginning of this fiscal year, the company has been able to maintain its operating margins and increase sales volume significantly,'' Hero Honda Managing Director, Mr Pawan Kant Munjal, said.

It was hopeful of improving the performance in the coming months, he said.

The share closed on the BSE on Monday at Rs 850.85.