(Reuters) -Indian motorcycle maker Hero MotoCorp reported a lower-than-expected fourth-quarter profit on Tuesday, as it sold fewer vehicles and costs increased.
The company’s profit came in at 10.81 billion rupees ($126.7 million) for the January-March period, up 6.4% from a year earlier.
Analysts, on average, were expecting a profit of 10.95 billion rupees, according to data compiled by LSEG.
Hero’s motorcycle and scooter sales fell for the first time in six quarters, declining about 1%.
Analysts said that impact of Hero’s more profitable mid-range motorcycles such as the ‘Xtreme 125R’ have already been played out.
Sales of such motorcycles, which sell for between 90,000-100,000 rupees, had helped the company’s revenue grow for all the quarters in the fiscal year ended March 31.
Domestic two-wheeler sales growth crawled to 1.4% from 24.9% in the same period last year, hit by weak rural liquidity and cautious financing, especially towards the end of the quarter, industry data showed earlier this year.
The rural market accounts for a little over half of India’s total two-wheeler sales.
Still, Hero’s revenue from operations grew 4.4% to 99.39 billion rupees, beating analysts’ estimate of 97.38 billion rupees, which analysts said was helped by price hikes.
Cost of raw materials consumed rose 4.8%, pushing total expenses up 4.4% to 87.2 billion rupees.
Rival TVS Motor last month reported fourth-quarter profit above estimates, while Bajaj Auto is yet to report results.
($1 = 85.3400 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Varun H K)
