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Hero Honda Continues on the Growth Path, Demonstrates Consistent Growth in Q1

PTI, New Delhi - July,18, 2005

Q1 result highlights:· Total turnover up by 15 %; Net Profit increases by 7.6 %
· Volume sales increases by 13%
· EPS shows consistent growth at 7.6%
· Glamour, the new offering in the premium executive segment, introduced in South India

New Delhi, July 18th 2005: Hero Honda, the ‘World No. 1’ motorcycle manufacturer today announced its first quarter results for the FY 2005-06, demonstrating consistent growth quarter over quarter.

The company recorded an increase of 13% in its sales volume during the quarter, as compared with sales during the corresponding quarter in the last FY. The company sold 6,87,567 motorcycles during April-June 2005, as compared with 6,09,123 motorcycles during April-June 2004.

Hero Honda sold over 200,000 units for each of the months in the quarter, having established the benchmark for the industry in the previous FY.

TOTAL TURNOVER (sales turnover plus other income, net of excise) grew to Rs. 2007.63 crore, a significant growth of 15% over Rs. 1745.21 crore recorded in the corresponding period last year. NET SALES (Income from Operations) showed a remarkable growth of 14.8 % over the corresponding period, from Rs.1722.28 crores to Rs. 1977.06 crores.

PROFIT AFTER TAX (PAT) increased to Rs. 204.45 crore, an impressive growth of 7.6 % over last year’s Rs. 190.07 crore. The PROFIT BEFORE TAX went up to Rs. 298.12 crore, registering a increase of 3.5% over Rs. 288.04 crore recorded in the corresponding period last year.

OPERATING MARGIN (EBIDT) for the first quarter saw a marginal decline of 1.8 % i.e 14.8%, as compared with 16.6 % in the corresponding period last year. The reduction in EBIDT margin is very marginal considering the impact of steel price increase in April 2005 and disruption of production due to constraints in supplies of some components during the quarter.

Announcing the results, Mr. Brijmohan Lall, Chairman, Hero Honda Motors Ltd., said, “With the first quarter ending, I feel we have made a good beginning to the current financial year. Our consistent growth performance in the last quarter demonstrates our continued efforts to deliver the best products and service to our customers. We are confident that with the support of our customers and business associates we would be able to continue on the growth path in the coming months as well.”
Mr. Pawan Munjal, Managing Director, Hero Honda Motors Ltd., said, “During the last quarter we focused on consolidating our undisputed leadership in the executive segment, with the launch of Glamour, our new 125 cc offering. The model, which has been launched in only South India so far, has been really appreciated by our customers. We will continue to launch Glamour in the other regions in the coming months.”
“Super Splendor, which was launched in March this year has also received a very encouraging response from our customers. In the first four months of its launch the company has already sold 150418 units”, he added.

During the first quarter of the FY 2005 – 06 the company also established a landmark figure of over 2 million members for the Hero Honda Passport Programme- its unique CRM initiative, making it Asia’s biggest CRM programme.

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