Hero MotoCorp’s Net profit Rises by 19.4% for 2011 Q2 : BikeAdvice

Hero MotoCorp’s Net profit Rises by 19.4% for 2011 Q2

Posted: 21 Oct 2011 04:56 AM PDT

Original Source: Hero MotoCorp’s Net profit Rises by 19.4% for 2011 Q2 from BikeAdvice.in

India's largest two wheeler manufacturer, Hero Motocorp. recently announced its quarter two result for the financial year 2011-12. The company has reported jump of 19.4% in net profit compared to previous year. This is the first quarterly financials of company after the company changed its name. The results are above the expectation of various brokerage houses. The profit of company is largely driven through sales. The company sold 1,544,314 units in July to September 2011 quarter up by 20.09% compared to 1,285,944 units in previous year same quarter.

Mr Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp said, "Our bottom line results reflect our record top line performance over the past six months. This performance has come despite the rising food inflation and fuel costs. These two areas remain a concern for the industry, as it might adversely impact consumer spending in the coming months. However, we remain confident of carrying forward the buoyancy in our sales. We expect our retail volumes to peak during the festive month of October, and in anticipation of rising market demand for our products in the coming months, we have been augmenting capacity at our existing plants," he added.

The company reported total income of Rs. 59.09 billion in 2011Q2 up by 27.62% compared to Rs. 46.30 billion in the last year same quarter. The company has reported net profit of Rs. 6.03 billion in Q2 2011-12 compared to profit of Rs. 5.06 billion in Q2 2010-11. This is the highest ever net profit the company has made in any quarter. The previous highest was Rs. 5.97 billion which company reported in the Q2 2009-10. The profit is also above the estimates of Rs. 5.50 billion to Rs. 5.70 billion reported by various brokerage houses. The company has seen jump of 2.38% in total income and 8.20% in Net profit compared to 2011Q1.

The company has reported better than expected OPM (operating profit margin). The company has reported OPM of 15.76% compared to 13.36% last year and 14.39% last quarter. The year on year jump in OPM is result of Royalty treatment. Previously it was part of operating expense but now the company considers it under the head of Depreciation. However, on the quarter of quarter basis the company gains 127 basis points in operating margin. The quarter on quarter margin expansion is attributed to better realization and lower raw material cost. The company's average realization per vehicle remained Rs. 37,456 compared to 36,858 in previous quarter and Rs. 35,082 in the last year quarter. Raw material cost as a % of Net Revenue remained at 73.72% down from 75.23% in previous quarter and 75.05% in the previous year quarter. However, the company's total expenditure is gone up due to increase in employee cost and depreciation.

It seems that going forward we will see better profitability from the company as the raw material cost is going down and the company's royalty expense is now fixed rather than % of sales. Further, on the back of new launches and better realization the company will have better net income in upcoming quarters.

- Mahavir Kothari

(Source: Hero Motocorp. Press release)

Share on Facebook

Problems Due to a Wide Rear Tyre – Esp. For Yamaha Fazer Owners

Posted: 21 Oct 2011 04:51 AM PDT

Original Source: Problems Due to a Wide Rear Tyre – Esp. For Yamaha Fazer Owners from BikeAdvice.in

I am completing two years with my flaming orange beauty "Fazer" on coming 30th November. Let's have some flashback before starting the main topic of this article. I wrote my first official ownership article which was posted by Deepak on 14th December, 2009. This article is having 47 valuable comments till date. The title was - Aerodynamics, Ergonomics & Steering Geometry of Yamaha Fazer + Ownership Review. I also won a 1:12 Scale model of Suzuki GSX-R 750 as a token of appreciation from Deepak and Bikeadvice.

In that article, I had mentioned some merits and demerits of wide rear tyre of Fazer. Few of the key lines were "The main disadvantage with this wide tyre is chicken strips. As shown in photograph, the two side portions of the tyre are remaining almost unused because we are not habitual to tilt our bike too much while taking turn.

These strips are known as chicken strips. The middle portion which is used mostly gets wear after long run while the side strips remain unused. This condition leads to splitting of tyre and also up to burst."

So now, I want to enlighten a practical example of chicken strips to you guys. Guess what: It is my Fazzy's rear 140/65 R 17 tyre. It has recently pretentious because of spreading chicken strips.

How it took place?

There are many factors which boost up the chicken strips. Continuation of chicken strips takes place according to road surface, driving habits and tyre properties. Let us discuss the factors which intended and contributed to generate these chicken strips on my bike tyre.

I used to drive 35-40 kms per day during the first 1.5 years (Home-Office-Home). During this entire ride, approx 2.6 kms road was entirely rough terrain. It was full of sharp pebbles, mud, cavities, cow dung etc. I got 4 punctures during my first 9 months just because of sharp small pebbles. The tyre had lost its surface toughness very early because of that rough terrain.
As said earlier, I am not habitual to tilt my bike too much while taking turns. It is not at all required as the speed of my bike always remains in limit at the time of turning. We can divide the total width of the tyre (140 mm) in to three groups: First is the middle portion used for upright driving conditions. Second are the two side portions used at the time of turning. Lastly, the two extreme side portions which almost remain unused (shown in yellow).

Above diagram shows the comparison of new and used wide tyres. Grey portion shows the wall thickness of tyre. After considerable use, the thickness of middle portion decreases bit as it is used mostly. The extreme side portions shown yellow retain its original wall thickness. So as a result a wall thickness gradient stimulated throughout the total tyre width (140 mm).

Each and every tyre works under cyclic loading conditions. The tyre portion at the contact patch always remains in loaded condition even with stationary vehicle. The rest of the tyre portion remains unloaded. As we drive the vehicle, the contact patch and so as tyre portion constantly got changed because of forward motion of the vehicle.

Above diagram illustrates the same. There are always three types of tyre portions exist at the time of driving. Portion under loading, Portion that will be under loading and Portion that was under loading. This happens at each time fraction of moving condition and so each and every tyre portion has to follow this process of cyclic loading. We'll relate this cyclic loading in next affecting factor.

Now let us imagine a used tyre with decreased wall thickness at middle. Below diagram shows the comparison of used unloaded and used loaded tyre.

Let us define two points "A" and "B" from where the thickness gradient starts. Now suppose the tyre is loaded vertically. As a result, the curvature of the tyre becomes bit flat. Same condition happens when any reaction from the road takes place. Again recalling the cyclic loading, this tyre portion is also undergoing the same cyclic load.

As a result, a constant tearing process occurs at two points A and B shown as red arrows. This tends to generate cleave at points A and B. Below photo shows cleave generated in my tyre with enlarged view.

We can easily observe the reinforcement fibre cables in cleave which gives us the idea about the depth of cleave.

As I said earlier, I got 4 punctures during my first 9 months just because of sharp small pebbles. Plugs are used as a repairing activity for this wide tubeless tyre. These plugs are also cause tyre cracking due to cyclic loadings. Below photo illustrates the same.

We can observe the crack distribution and propagation in nearer area of inserted plug. A hole generated from pebble can also be seen in the photo.

Sharp pebbles are also very hazardous to used tyre. Below photo shows a pebble penetrated hard in my bike tyre.

A large area has been covered by this pebble and created so many cracks on the surface. If I continue to use this tyre, the crack will propagate and will meet the cracks generated at nearer groove. If I will remove this pebble, it will generate very large hole on the tyre surface.

Below photo shows the crack distribution in the tyre groove.

We can observe more cracks in the corners. We can consider these corners as points "A" and "B". These cracks propagate and become cleave after extensive usage with improper handling.

Above photo gives us the idea about crystal cracks generated in few tyre grooves. Crystal crack differs from normal crack in appearance and depth. These cracks are generated because of thermal stresses on the tyre surface. Results are same as before said normal cracks.

Above photo shows all the defects together. We can observe huge cracks already generated as a result of said factors. This cleavage will result as chicken strips for this wide tyre.

Unfortunately, the chicken stripes always tend burst the tyre during riding. I advise you all to check your bike tyres regularly to reduce fatal accidents. You can also judge this defects if your bike is lacking its original power and mileage. Another way to predict this is the time period for air/nitrogen filling.

Regards,
Dhruv Panchal

Share on Facebook

Autosol

Friday, October 21, 2011