Corona stings Hero Moto profits; Q1 net crashes by 95%

NEW DELHI: Hit hard by corona slowdown and decline in sales, Hero MotoCorp reported a 95% decline in net profit for the first quarter of 2020-21 at Rs 61 crore against Rs 1,257 crore in the same period last year.
The country’s largest two-wheeler maker said that revenue from operations was down 63% at Rs 2,972 crore against Rs 8,030 crore in the first quarter of 2019-20.
“The financial results are not comparable with corresponding quarter and not a reflection of underlying performance, as the quarter was impacted by lockdown for most parts of the three months’ period,” the company said.
Niranjan Gupta, Chief Financial Officer of Hero MotoCorp, said that the Covid-19 period has been an “unprecedented challenge” for the automotive industry, as indeed for several other sectors and economies around the world.
“Hero MotoCorp was quick to begin work on cost control and efficiencies that enabled us to limit the impact of the unprecedented times during the first quarter. Cash conservation efforts and rationalization of expenses, along with productivity enhancement measures, have helped us pass through the uncertain period,” he said.
The company said that it is now entering a phase of “rapid recovery” and return of demand. “We are already seeing green shoots, and expect them to sustain and get stronger as we move towards the festive season,” Gupta added.
The company cited July sales in support of its revival theory, saying the sales volume in the month was more than 95% of what it had achieved in the pre-covid sales. “… and we do see positive trend moving forward.”