Hero Honda reports good results!

Strong quarter in terms of sales nos: Hero Honda

Hero Honda in Q3 FY08 has reported consolidated net profit of 275.01 cr versus Rs 209.18 cr on YoY basis. During the same period, net sales at Rs 2743.07cr versus Rs 2666.05 cr on YoY basis.

Speaking to CNBC-TV18, Pawan Munjal, MD at Hero Honda said that third quarter is always a strong quarter in terms of sales numbers due to the festive season.





Excerpts from the interview with Pawan Munjal:



Q: How has the 3rd quarter been in terms of sales?



A: Third quarter is always a strong quarter in terms of sales numbers due to the festive season. We have actually held back on our expenditure on promotions, which we normally do in the Q3 around Diwali. We did have a promotion, which was just on one of our models -CD Deluxe. So that was one of the big saving. The commodities have been behaving pretty well in the past many months, this quarter we had a very steady quarter, which also has helped us on the overall material cost and finally on our other expenditure again some marketing costs, there has been some savings.



Q: We see roughly Rs 52 crore as your other income coming in. Where is this money coming from and your EBITDA margins are way above our expectations, we estimated around 11.7% but it is at 14%?



A: The other income is majorly the treasury income where also we are as a company fairly conservative with the markets the way they are, we normally tend to be conservative. After all we are a motorcycle manufacturing company - that’s where our focus is.



Q: EBITDA margins are above our expectations. How did you manage that and going forward will you be able to sustain it?



A: Again the reasons, I just mentioned for a strong Q3 PAT, same reasons for the EBITDA, all that stuff that we did on holding back on the promotions and the marketing expenditures and the commodities cost in terms of the material cost, we have seen a strong EBITDA and going forward, I am very confident that we will continue this trend. This is obviously a departure from last many quarters where I have been saying that there is going to be a pressure on the margins but this time I am very confident that this particular trend will continue for us going forward.