Hero MotoCorp, India’s largest manufacturer of motorcycles, fell short of its projected first-quarter profits on Thursday, attributed to a decline in sales volume. Despite a 32% increase from the previous year, the company’s standalone post-tax profit amounted to 8.25 billion rupees ($99.9 million), falling below analysts’ expectations of 8.86 billion rupees.
This outcome contrasts with its competitors Bajaj, Royal Enfield under Eicher ownership, and TVS Motor, all of which exceeded anticipated results. The Indian motorcycle industry has been grappling with challenges in regaining pre-pandemic sales figures. The increased cost of entry-level models has deterred buyers in crucial rural markets from making purchases.
Traditionally, rural India accounted for the majority of two-wheeler sales. However, the company has experienced declining sales volumes in recent years, with sales for the quarter dropping by 2.7% to 1.35 million units compared to the previous year.
Household incomes have also been constrained by ongoing retail inflation, despite some relief from the previous year, with rising food prices attributed to unpredictable monsoon rains. Quarterly revenue showed a 4.5% increase, reaching 87.67 billion rupees, primarily due to a price hike stemming from new emission regulations that increased the production costs of vehicles.
On Thursday, Hero MotoCorp’s shares closed at Rs. 3035.90 on the National Stock Exchange (NSE), reflecting a decrease of 0.78%.