Hero MotoCorp shares fell over 2 per cent on Wednesday as the company reported 13.97 per cent drop in its total two-wheeler sales at 4.80 lakh units in August 2015 over August 2014. The announcement was made after market hours on Tuesday.
At 9.39 am, the scrip was trading 2.17 per cent lower at Rs 2333.45. It opened at Rs 2360.15 and had touched a high and low of Rs 2369.20 and 2302.70, respectively, in trade so far.
According to Angel Broking, the sales were marginally below our estimates of 5 lakh units. Poor sentiments in the rural areas due to deficient rainfall and moderate growth in crop MSP’s impacted the volumes. Further, the sales were also affected by high base of the corresponding month last year (last year the festive season had commenced in September leading to inventory built up in August 2014). The festive season this year is delayed by about a month and would start in October 2015.
In the BSE filing, the company said, Hero MotoCorp has lined up a slew of new products leading up to the festive season. The festive season this year will begin almost three weeks late as compared to last year, and this shift in season is also reflected in the subdued sales in August vis-a-vis the same period last year.
The two-wheeler manufacturer will commence the new launches with the introduction of two brand new scooters, followed by new bikes. With the upcoming festive season, Hero MotoCorp expects sentiments to improve which in turn is likely to revive market demand. The industry expect the second half of the year to be better than the first two quarters.
For the quarter ended June 2015, the company posted net profit of Rs 750.34 crore, up 33.33 per cent, against Rs 562.76 crore in the corresponding quarter a year ago.
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