Hero Honda’s Profit Drops by 20%
Hero Honda Motors Limited, India's largest two-wheeler producer, reported its biggest fall in every quarter profit in more than 3 years as raw materials rates eroded gains from advanced sales. Hero Honda MD Pawan Munjal said- "I do foresee margins to be under pressure in short term, "For the last few months, the industry has faced many issues of limited supply of rising input costs & components." Bike Manufacturer said it spent 44% more on rubber, steel & other materials in the last quarter such as economical growth in China & Indian market improved commodity prices. Raised prices of its bikes by as much as Rs 1500 in December month. Fight may hike for the Delhi based manufacturer as Honda Co works to expand its completely owned Indian unit after selling its 26% stake in Hero Honda. Gaurant Dadwal said Increasing commodity prices have plainly dented this quarter's profit," Mumbai analyst at Jaypee Services Limited., who has a 'sell' rating on the stock. "With their rate growth in Dec it is possible that they will be able to regain their margins."