BENGALURU (Reuters) – India’s Hero MotoCorp Ltd, the world’s biggest two-wheeler maker by sales, reported a bigger-than-expected decline in second-quarter profit on Thursday as spending rose and sales volume was declining.
Profit after tax fell 10% to 7.16 billion Indian rupees ($86.37 million) for the three months ended September 30, from 7.94 billion rupees a year earlier, according to a filing. ‘exchange.
Analysts on average had expected a profit of 7.41 billion rupees, according to data from Refinitiv IBES.
The number of two-wheelers sold during the quarter under review amounted to 1.43 million compared to 1.44 million a year ago.
The cost of materials consumed increased by 7.4% to 65.17 billion rupees, pushing up overall expenditure by almost 9%.
“Global macro headwinds can make the playing field a bit uncertain, and it will be important to navigate the same over the coming quarters,” CFO Niranjan Gupta said in a statement.
“As commodities cool and the rate cycle peaks, the medium-term outlook for the Indian auto industry looks quite encouraging.”
The company also said it will continue to build its presence in the premium segment through several launches over the coming quarters.
Hero MotoCorp is also turning to cleaner vehicles and launched its first electric scooter last month after several months of delay. It has made a series of investments in electric vehicle startups in recent months.
Operating income increased by 7.4% to 90.75 billion rupees.
($1 = 82.90 Indian rupees)
(Reporting by Anisha Ajith in Bengaluru; Editing by Shailesh Kuber)