Hero Honda net profit up 48.9 pc

The company will be investing Rs 350 crore in 2010-11 on capex, which includes Rs 130 crore for increasing the company's production capacity at the Haridwar plant.
"The net profit, the turnover and the number of units sold in the fourth quarter is the highest ever, and we have been able to achieve this due to all round growth in all the segments," Hero Honda Senior Vice-President (Marketing and Sales) Anil Dua told reporters here.

The total turnover during the last quarter of 2009-10 also increased by 20.2 per cent to Rs 4,122.32 crore over the year-ago period.During the January-March period, Hero Honda sold 11,86,536 units, up 18.9 per cent over last year.For the entire 2009-10 financial year, the net profit after tax of the company soared by 74.1 per cent to Rs 2,231.83 crore.

The total turnover last fiscal stood at Rs 15,860.51 crore, up 28.1 per cent compared to 2008-09, the company, which is also the world's largest two-wheeler maker, said.
The company also declared a final dividend of 1,500 per cent or Rs 30 per share on each share of Rs 2.

During FY'10, the company's total sales increased by 23.6 per cent to 46,00,130 units. It had launched nine new models and variants across segments last fiscal.
Commenting on the plans for the ongoing fiscal, Hero Honda Chief Financial Officer Ravi Sud said, "We will invest Rs 300-350 crore in total capex, which includes capacity expansion at Haridwar, refurbishing of plants (Gurgaon and Dharuhera) and process improvement."

The company is increasing its total capacity to 5.7 million units per annum from the current 5.4 million units by August-September, he added.Sud said the company will invest about Rs 130 crore to ramp up production at its Haridwar plant to 7,000 units per day from 5,000 units a day at present.

When asked about the company's proposed fourth plant, Dua said, "The existing three plants are fully capable of meeting our requirement for the fiscal 2010-11, but beyond that we will require extra capacity."A feasibility study is currently on and the company will decide on the plant in another two months' time, he added.

Sud said ideally the company will be looking for an initial capacity of half a million units per annum for the fourth plant, but declined to comment on further details such as investment and location.

On raw material prices, Dua said the company is keeping an eye on commodity price movements, and is absorbing the pressure without passing on the burden to customers.