The country’s largest two-wheeler manufacturer, Hero Honda Motors Ltd beat analyst forecasts posting a net profit of Rs306.30 crore for the quarter ended 30 September, a 50% increase over the corresponding period last year. The biggest chunk of the company’s boost in performance has come from its bread and butter segment — the 100 cc bikes category. Cumulatively, for the April to September 2008 period, Hero Honda registered a 20.2 per cent growth in unit sales in the motorcycles with engine capacity between 75cc and 125cc category, according to statistics provided by the Society of Indian Automobile Manufacturers (SIAM). So, Hero Honda has proved that big is not good, but small is beautiful. As you know, this fincancial year is the 25th year of the company. This year in April, the company inaugurated its new plant at Haridwar where it is getting maximum tax benefit. It has number of strong brands like CD Deluxe, Glamour, New Splendor NXG, Splendor plus and Passion Plus. Also, in premium segment ther is Hunk, CBZ X-treme and Karizma. Hero Honda’s results are giving hope that the recession in this two wheeler auto sector is near to end.
The stock has remained strong even when the market crashed. Infact, it touched a new high at Rs. 735 in October, when most of the stocks were showing 52 week lows. At current level of Rs 720, it is more attractive. Hold the scrip and add more at more decline.
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