NEW DELHI, Jan 20 (PTI): Riding on the back of benefits of declining commodity prices, cost rationalisation and growth in rural market, the country’s largest two-wheeler maker Hero Honda today posted a 9.24 per cent growth in net profit at Rs 300.42 crore for the third quarter (Q3) ended December 31, 2008.
“Our third quarter results show the benefits of the strategic initiatives we have undertaken over the past couple of years,” Hero Honda Motors MD and CEO Pawan Munjal told reporters here.
He said the company has been able to post growth in profitability despite the current deteriorating business environment.
Softening of commodity prices, cost rationalisation, strengthening of the premium for the portfolio and a growing rural market have played key role in the company’s performance, he said.
“There has been a growth in the rural sales and currently rural market constitutes about 40 per cent of the overall sales of the company with the rest coming from urban areas.”
In Q3 the net operating income rose nearly 5 per cent to Rs 2,881.27 crore, from Rs 2,750.20 crore in the corresponding period last fiscal.
The company has also benefited from increasing production at its Haridwar plant where it enjoys a 10-year tax holiday.
“Currently we are producing about 3,000 units per day, which will be increased to 4,000 units per day,” Munjal said.
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