Q4 profit rise at Hero, but margins impacted by raw materials shortage

India's market-leading maker of bicycles and motorcycles - and one of the biggest bike manufacturer's in the world - has posted a 42 percent rise in Q4 profits in its motorcycle division, but warned that rising raw material prices could hurt group profit margins.
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Hero Honda posted a net profit of $48m in the quarter ended March 31st. It has a 48 percent share of the Indian motorbike market and will expand by 11-20 percent in this fiscal year, but the company said rising costs remain a worry.

Hero Honda MD Pawan Munjal of the all-powerful Munjal family, owners of Hero, said: "There is going to be even stronger pressure on margins this year. The cost of steel and other raw materials have all increased."

Hero Cycles Limited is claimed by the Hero Group to be the world's largest manufacturer of bicycles. Founded in 1956, it has 55 million bicycles on the roads, and dirt tracks, of India, and has two huge bike making plants at Ludhiana and Sahibabad in Uttar Pradesh. The two factories churn out 12,500 bicycles a day, most for domestic consumption, with the remainder exported to Europe, USA, Africa and the Middle East.

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