Shares of Hero Motorcorp are at a 5 month high. Know why

Shares of Hero Motorcorp Ltd., India's top bike maker, hit their highest level 5-1/2 months, after the company reported a sharp jump in quarterly earnings thanks to lower input costs.

Hero Motor said its first quarter Net Profit rose 33 percent to 750 crore rupees compared with 563 crore rupees in the same quarter a year ago. Sales during April-June fell 2 percent to 6,856 crore rupees from 6,999 crore rupees in the year ago period as unit volumes declined 5 percent to 16.4 lakh units in the past three months due to tepid rural demand.

Hero Motor said its operating margin in the first quarter gained 16.53 percent from 15.06 percent as input costs of steel, rubber and other materials fell due to a slide in global commodity prices.

Hero rose 2.2 percent, or 60 rupees, to 2,757 rupees, the highest since February 16, on the National Stock Exchange, where 4.22 lakh shares were traded by 10.20 AM compared with the 5-day average of 6.76 lakhs.

Hero Motor's market capitalisation has risen 6.2 percent in the past one year to 53,870 crore rupees as investors preferred its fuel-efficient bikes over rival products.

Image credit: Indiatimes