(Reuters) -Hero MotoCorp, India’s top two-wheeler maker by sales, reported a better-than-expected quarterly profit on Thursday, on the back of demand fueled by domestic tax cuts as well as strong exports.
The maker of the Splendor motorcycle posted a 15.7% rise in quarterly profit to 13.93 billion rupees ($158.5 million) in the July-September quarter, topping analysts’ estimates of 13.78 billion rupees, according to data compiled by LSEG.
With global forays and a push into electric mobility, Hero is positioning for sustained growth in overseas markets and emerging segments.
Hero has partnered with distributors in Europe to expand its overseas shipments. In October, it partnered with UK-based distributor MotoGB and French distributor GD France after announcing it will begin to sell its products in Italy and Spain.
Sales for the three months ended September 30 rose 11.25% to 1.69 million vehicles, driven by a 77% rise in exports.
Domestic sales were also boosted by lower tax on motorcycles of engine capacities up to 350cc which are the bulk of Hero’s sales.
September’s domestic sales climbed about 25% from the previous month to 647,582 units, buoyed by festive-season demand and strong momentum in the entry-level, deluxe and scooter categories.
The two-wheeler maker’s revenue rose about 16% to 121.26 billion rupees, while its total expenses increased about 15%.
Hero’s earnings before interest, taxes, depreciation and amortisation margin grew by 55 basis points year-on-year to 15% during the quarter.
Analysts anticipated the margin to improve, mainly by stronger operating leverage, though partly offset by higher launch-related costs following the introduction of three new models in the reported quarter.
Rivals Bajaj Auto and TVS Motor also posted an export-driven profit rise in the reported quarter.
($1 = 87.8950 Indian rupees)
(Reporting by Urvi Dugar and Anuran Sadhu in Bengaluru; Editing by Krishna Chandra Eluri)
