Hero Honda Motors Ltd has announced financial results for third quarter of this financial year. The auto maker reported 7.1 per cent increase for Q3 despite 4 per cent drop in sales.

It should be recalled that government had announced 4 per cent excise duty cut in the economic booster package which helped to propel demand in automobile sector. Banks had also cut auto interest rates in line with key rate revision by Reserve Bank.

The Managing Director and Chief Executive, Pawan Munjal said, "We benefited 2 per cent from easing of commodity prices in the quarter as compared to the previous quarter. We did not offer any promotional schemes in the festive season which we gave last year,"

He asked for more retail finance to boost demand in the auto sector. The company is optimistic to increase in sales in marriage season.

On interest rate cut by various lenders, Mr. Munjal said, "It is one thing to cut rates and another thing to actually disburse loans to customers. We would like to see the money reaching to customers."

Hero Honda reported a net profit of 3 billion rupees in the third quarter.

Meanwhile, Hero Honda's closest rival, Bajaj Auto Ltd reported 23 per cent drop in net following the impact of global slowdown.