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Hero MotoCorp Falls on Disappointing March Quarter Numbers

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Hero MotoCorp Falls on Disappointing March Quarter Numbers
Shares of Hero MotoCorp fell over 4 per cent to hit intraday low of Rs 2,252 after the company reported a 14.05 per cent decline in net profit at Rs 476.53 crore for the fourth quarter ended March 31, 2015 due to a one-time impairment loss.

The company had posted a net profit of Rs 554.43 crore in the same period of the previous fiscal.

"This (profit after tax) is after impairment of Rs 155.04 crore ($25 million) of equity investment in Erik Buell Racing, Inc," Hero MotoCorp Ltd said in a statement.

Hero MotoCorp disappointed the Street as analysts expected the company to post jump of 14.8 per cent in its net profit for the January-March quarter to Rs 636 crore.

Analysts expected Hero MotCorp to post revenue growth of 1.94 per cent.

Meanwhile, Hero MotoCorp's management has guided for the industry growth of 5.5-7 per cent in FY16 and it expects bike sales to grow at 3-4 per cent and expects that scooter sales will drive growth going ahead.

Market expert Ambareesh Baliga told NDTV that Hero MotoCorp can correct to 2,150 in the near term and investors should buy the stock at dips because the company is the market leader in two-wheeler segment.

"Next 4-5 months could be difficult for Hero MotoCorp if monsoon rains are poor, but the stock is unlikely to be impacted too much because it has not performed in the last one year," Mr Baliga added.

The shares of Hero MotoCorp ended 2.2 per cent lower at Rs 2,301. The stock was underperformed the Nifty which ended 1.7 per cent higher.


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