Rivalry, slowdown scale Hero net 5% - Daily News & Analysis

Fourth quarter (January-March) net profit of Hero MotoCorp, India's biggest two-wheeler manufacturer, dipped 4.9% to Rs 574.23 crore as sales continued to remain sluggish due to strong competition and slowdown in the two-wheeler segment. Hero sold 15.27 lakh units, down almost 3% from 15,72,027 units during the fourth quarter last year. Editda margins declined 150 basis points (bps) to 13.8%. The company said it remained "cautiously optimistic" about the overall growth in the industry. "FY13 has been a rough year for the overall Indian auto sector. Weak macroeconomic sentiment, coupled with subdued consumer confidence, adversely impacted the industrial growth and sales volumes," said Pawan Munjal, MD and CEO. For analysts, the results were better than expected despite Hero's third consecutive decline in quarterly profit. "The company's net profit was driven by strong Ebitda margin. The strong beat in margin was due to higher realisation and lower raw material costs," said Gautam Sinha Roy, vice-president – equities, Motilal Oswal Securities.  Competition is expected to intensify further this fiscal. Hero's former partner Honda Motorcycles and Scooters India has already announced aggressive plans, while companies such as Bajaj Auto and Yamaha India will also be looking at grabbing a larger pie in the two-wheeler segment with their new launches. On Friday, Hero MotoCorp hiked prices of its products ranging from Rs 500 to Rs 1,500 with immediate effect. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGg1w4d9tNYoIQjT2gcuaOsS3o2WA&url=http://www.dnaindia.com/money/1827587/report-rivalry-slowdown-scale-hero-net-5pct

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