Hero Honda registers profit, while Maruti sees a dip

HHML profit is registered at Rs 298.70 crore as against Rs 195 crore in the corresponding period last fiscal, while MSIL profit of Rs 297.7 crore for the fourth quarter is a drop of 33.7 per cent from Rs 448.6 crore during the same period last year. The company's total revenue (net of excise) in the quarter grew 9.4 per cent to Rs 5,069.9 crore (Rs 4,636.2 crore).

Maruti claimed that the drop in profits was due to a new depreciation policy, where depreciation on assets would be calculated for a shorter duration. Under the new policy, the full depreciation for plant and machinery used for car productions will be brought down to 8 years from 13 years earlier, and on dies and jigs (equipment used for making car body frames) will be brought down to 4 years from 5 years. This means that total return on capital investment on new cars will go down and the company will take a hit on its profit for a few years.

Talking about the profitability of HHML, Pawan Munjal, Managing Director said: "Profitability increased due to the financial discipline we enforced in our core activities - sourcing, production, and marketing - during the fiscal year. Our cost reduction programme has worked and that's adding to our bottom line. There was also some relief from the softening commodities prices of nickel and aluminium in the January-March quarter." The company sold 33.37 lakh two-wheelers in FY '08 against 33.36 lakh two-wheelers in the previous fiscal year. Two wheeler sales recorded 3.2 per cent rise to 8.84 lakh as against 8.55 lakh units last year.

Hero Honda's new plant in Haridwar is likely to increase its profit as the facility is entitled to excise and income tax rebates for 10 years. The plant has the capacity to produce 7 lakh vehicles per year. The company had also increased prices by Rs 1,000 to neutralise rising raw-material costs.

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CEAT

CEAT Ltd, one of India's leading tyre manufacturers, has reported growth in the financial year, ended 31st March 2008. The net profit for the year stood at Rs.148.6 crores up by about 4 times compared to Rs. 39.25 crores for the previous year. The company's gross turnover for the year stood at Rs. 2603 crores as compared to Rs. 2391 crores last year, up by 8.9 per cent. Net sales improved from Rs. 2135 crores to Rs. 2330 crores.

CEAT's performance for the quarter-ended March 2008 is also impressive. The net profit for the quarter stood at Rs. 76.93 crores, up by 228.6 per cent as compared to Rs. 23.41 crores for the corresponding quarter in the previous year. The gross turnover for the quarter stood at Rs.722 crores as compared to Rs. 631 crores last year, up by 14%. EBITDA margin to net sales for the quarter dropped to 7.6% from 9.8% during the same period last year

BOSCH

Bosch Limited, the flagship of the Bosch Group in India, has registered a growth of 12% for the quarter Jan-March, 2008, inspite of slowdown in Auto sector.

The company generated net sales of Rs. 12,015 million in Q1 2008 Jan - March, registering a growth of 12.3% over Jan-March, 07. But the profit before tax of the company was down 9.8% at Rs. 2,315 million in Q1, 08 compared to Rs. 2,566 million of Q1, 07. The profit after tax stood at Rs. 1,617 million, down 12% compared to Q1, 07.

The company termed the results as below expectations but hopes that as a result of Union budget measures to certain sectors of the auto industry, automotive market will pick up in the coming quarters leading to higher sales for the company.