Hero Honda – Investors

Hero Honda Motors Ltd., today announced outstanding results for the first nine
months (ending December 2001) of the FY 2001-02, thereby strengthening its 'performance leadership' in the Indian two-wheeler market.

The company's total turnover (sales turnover & other incomes) for the period has jumped significantly by 40% as compared with the corresponding period last year. It achieved a sales turnover of Rs 3209.93 crore for the first nine months of FY 2001-02 (April - December 2001), demonstrating a significant growth of 39% over Rs 2316.84 crore turnover for the corresponding period last year.

Profit after tax registered a significant growth to Rs 310.37 crore from Rs 190.75 crore, an increase of 63%. The profit before tax has also gone up from Rs 287.92 crore to Rs 476.09 crore registering an impressive increase of 65%. For the quarter, the performance was even more impressive with PBT and PAT growing by 90% each compared to the corresponding period of last year.

The company also registered a substantial increase in operating margin during the third quarter of the current FY (October-December 2001). The operating margin for the third quarter was an impressive 14.51%. The cumulative operative margin of 13.41% is a substantial increase from 11.74% for the last year. According to Mr. Pawan Munjal, Director and CEO, Hero Honda Motors Ltd., "This has been achieved through our dedicated efforts towards cost rationalization, higher indigenisation, better working capital management and improved manufacturing efficiencies. This makes Hero Honda among the best managed companies in the country today."

Hero Honda Motors Ltd. sold a total of 10,26,102 motorcycles between April-December, 2001, growing by 36% over 7,54,794 motorcycles sold in the corresponding period last year. This is substantially higher than the growth rate of 32% for the motorcycle industry and 13% for the two wheeler industry. With this, Hero Honda's market share in the motorcycles segment is an impressive 49% and that in the two wheeler segment at 33%.

Announcing the results at the board meeting held today, Mr. Brijmohan Lall , Chairman and Managing Director, Hero Honda Motors Ltd., expressed his pleasure on the remarkable achievement. He said, "As always, we continue to believe that these excellent results achieved by Hero Honda are a result of our continued focus on understanding and satisfying customer needs to the finest detail. The customer is pivotal in deciding on any strategies for the company. Our customer relationship programme, the Passport Programme, already has more than three lakh members." Emphasizing on the company's commitment towards maximizing value to its stakeholders, he added, "The announcement of the 250 per cent special dividend at the beginning of this quarter was a step towards providing better returns to our shareholders. It will always be our endeavour to provide better value to our stakeholders in the future as well. Starting today, the Hero Honda stock has also been listed on the Sensex, signifying yet another achievement for the company. We are sure it would further increase value for our stakeholders."

Considering the favourable market response towards Hero Honda motorcycles, Mr. Pawan Munjal , said, "Hero Honda has revised its sales targets for the current fiscal from 1.25 million to 1.40 million motorcycles. We have, in fact, already crossed the 1 million sales within the first nine months of this fiscal as compared to twelve months last year."