Here comes a relly bad news for Hero MotoCorp, the rupee depreciation already has eroded into the profits of many auto majors and now it is reported that rupee depreciation is likely to lead to around 24 per cent increase in Hero MotoCorp's royalty s to erstwhile partner Honda.
"We expect the royalty payment for the March quarter (Q4) to be lower than last quarter, as we expect the rupee to appreciate from the current level. Rs 53-54 (versus dollar) is not stable." said Ravi Sud Chief officer.
It was mentioned that in the third quarter ending December 31, the New-Delhi-based two-wheeler maker paid Rs 228 crore to the Japanese firm under a licensing pact that stretches till June 2014. It expects the fourth quarter payment to also remain at the same level or lower than the third quarter.
Despite higher royalties, Hero MotoCorp's profits in the December quarter rose 43 per cent to a record Rs 613 crore. It also sold the highest-ever number of vehicles at 15.89 lakh units. This is really a fact which shows the Hero group's influence among the Indians.
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