Hero Honda (HH) recorded its best ever quarterly sales of 1.4mn units during the quarter. Buoyed by the festive demand and increased capacity at its Haridwar unit, the company sold 0.5mn units in the months of October and December. Motorcycle volumes were higher by 25.8% to 1.34mn units while scooter volumes almost doubled to 88k units.

.. Due to the price hikes undertaken in June, August and December, average realisations are expected to increase 3.5% YoY. Revenues are expected to grow 33% YoY to Rs50.9bn.

.. Raw material cost per vehicle is expected to increase 10% YoY. This increase in input cost is expected to contract margins by 320bps YoY to 14.1%. However, on a sequential basis due to higher operating leverage margins are expected to expand by 70bps.

.. Inspite of an impressive surge in revenues, depressed margins will lead to a marginal 8% growth in PAT to Rs5.8bn.