* Hero profit misses estimates for 4th straight quarter
* Profit down 20.4 pct on lower sales, rising costs
* Under pressure from former partner Honda in slowing market
(Adds details, quotes)
MUMBAI, Jan 17 Hero MotoCorp Ltd,
India's largest motorcycle maker, missed estimates for the
fourth straight quarter on Thursday as net profit fell 20.4
percent on rising costs and falling sales that battered margins.
Hero, which is investing heavily in new technology and
export operations, is battling to protect its dominant market
share from former partner Honda Motor Co as the overall
"The last two quarters have been challenging for the Indian
auto industry on account of the delayed monsoons, rising fuel
prices and subdued sentiments," managing director Pawan Munjal
said in a statement.
Hero's sold 1.57 million vehicles in the October-December
quarter, down 1 percent on the same period last year. Total
expenses rose 5.6 percent during the quarter.
Hero's operating margin during the quarter fell to 12.59
percent from 15.63 percent in the same period a year previously,
and 13.86 percent in the previous quarter. Local rival Bajaj
Auto Ltd reported an EBITDA margin of 20.1 percent
during the third quarter of the current financial year.
As high domestic interest rates of 8 percent curtail demand,
India's automotive industry association this month cut its
motorcycle sales growth forecast for the financial year that
ends in March to 3-5 percent, from 5-7 percent earlier.
Since parting from Honda in 2011, Hero has been forced to
pump cash into its export operations, which were restricted
under the 26-year joint venture, plus new technology tie-ups.
Hero's domestic two-wheeler sales fell 2.0 percent in the
first nine months of the fiscal year that began in April,
against a 4.1 percent rise in overall industry sales, according
to data from the Society of Indian Automobile Manufacturers.
Honda, which has aggressively ramped up its presence in
segments traditionally dominated by Hero since the partnership
ended, saw its sales rise 37.4 percent in the same period.
Hero said profit for the October-December period was 4.88
billion rupees ($89 million), below the average market
expectation of 5.69 billion rupees, according to Thomson Reuters
I/B/E/S. Net sales rose 2.8 percent to 61.51 billion rupees.
($1=54.7700 Indian rupees)
(Reporting by Henry Foy; Editing by Dan Magnowski and Mike