BS-III discounts trim Hero MotoCorp profit by 13.9% to Rs 718 crore in Q4

India's largest two-wheeler firm Hero MotoCorp on Wednesday posted 13.9% decline in net profit at Rs 717.75 crore for the fourth quarter ended March 31, 2017 on back of sluggish demand for two-wheelers especially in rural areas post the government’s demonetisation exercise and higher discounting to liquidate stocks of BS III-compliant vehicles in March.

The company had registered net profit of Rs 833.29 crore in the corresponding period of the last financial year.

Total income from operations in the period under review dipped by 7.7% to Rs 7,488.08 crore. Total expenses in the period fell by 5.3% to Rs 6,667.30 crore.


Sales volumes during the quarter under review dropped by 5.8%. Hero MotoCorp sold 16,21,805 two-wheelers last quarter compared to 17,21,240 units sold in the fourth quarter of the last financial year.

Edelweiss Securities had estimated Hero MotoCorp to register 7% decline in revenues on back of 6% drop in volumes in Q4.The company's operating margins were expected to come down by 210 basis points sequentially to 14.9% because of higher discounts doled out in March to clear BS III inventory. Hero MotoCorp is estimated to have taken a one-time hit of Rs 200 crore to liquidate BS III stocks last month.

Shares of Hero MotoCorp were trading at Rs 3322.40 apiece, up by 0.99% on close on the Bombay Stock Exchange (BSE). The company announced the results after market hours on Wednesday.