Friday, April 25, 2008

Hero Honda Q4 performance beats estimate

Hero Honda Motors reported a substantial rise in standalone net profit for the quarter ended December 2007, beating analysts` expectations by a wide margin. Despite marginal growth in sales, India`s biggest two-wheeler maker managed to post better increase in earnings mainly with the helped of improvement in operating efficiency.

During the quarter, the profit of the company rose 31.47% to Rs 2,750.10 million compared with Rs 2,091.80 million in the same quarter previous year. The analysts` polled by Bloomberg had forecasted earnings of Rs 2,362.46 million for the quarter.

The company reported earnings of Rs 13.77 a share during the quarter, registering 6.88 times growth over prior year period, while the analysts` had estimated earnings of Rs 11.01 a share.

Net sales for the quarter rose marginally 2.89% over previous period to Rs 27,430.70 million, which was closely in line with the analysts` estimate of Rs 27,525.24 million. The total income for the quarter climbed slightly 3.54% to Rs 27,951.70 million compared with the prior year period.

During the quarter the company reported a rise in operating margin of 262.33 basis points to 13.95% on lower input cost. On the other hand, there has been increase of 57.17% in interest charge to Rs 86.60 million and rise of 8.57% in depreciation charge to Rs 408 million over previous year period.

For the financial year 2008, the company posted a 12.82% rise in net profit over fiscal 2007 to Rs 9,678.80 million above analysts` forecast of Rs 9,017.20 million. Net sales for the year climbed marginally 4.36% over previous period to Rs 103,318 million, which was below the analysts` estimate of Rs 104,075.24 million, while
total income in the year rose slightly 4.23% over last year to Rs 1,05,172.20 million.

The board of the directors has recommended a dividend of 950% i.e. Rs 19 a share of Rs 2 each for the financial year 2007-08.

Shares of the company gained Rs 20.15, or 2.69%, to settle at Rs 769.85. The total volume of shares traded was 39,937 at the BSE. (Thursday)


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