Hero MotoCorp receives income tax demand notice worth ₹605 crore
Upstox
2 min read • Updated: April 5, 2024, 1:36 PM
Summary
The tax demand along with interest is on account of certain disallowances for the assessment years 2013-14 to 2017-18 and 2019-20. Hero Motocorp has stated it will be filing appeals against the orders with appellate authorities including filing of rectification applications.
Hero Motocorp has received assessment orders and demand notices pertaining to six assessment years, amounting to a tax demand of ₹308.65 crore and interest of ₹296.22 crore, the company said in an exchange filing.
Hero Motocorp pointed out that this is on account of certain disallowances for the assessment years 2013-14 to 2017-18 and 2019-20.
The company said it will be filing appeals against the orders with appellate authorities including filing of rectification applications. The management believes the demand raised is unsustainable in nature and is unlikely to have material impact on financials, operations or other activities of the company.
Shares of Hero Motocorp, however, were trading 0.81% higher on Friday afternoon. The stock has returned over 10% since the beginning of the year.
A few days ago, Hero Motocorp had received an order from the Department of Goods and Services Tax, Maharashtra stating a tax demand worth ₹20.36 lakh along with interest of ₹20.27 lakh and a penalty of ₹2.18lakh.
For the month of March 2024, the company’s vehicle sales came in a tad lower at 4,90,415 as compared to 4,85,896 in the same month a year ago. Domestic sales fell to 4,59,257 in March compared to 5,02,730 last year while exports soared to 31,158 against 16,612 in March 2023.
During the third quarter, Hero Motocorp reported a 21% year-over-year growth in its revenue from operations at ₹9,724 crore while net profit rose 51% to ₹1,073 crore. The company posted a 47% growth in its earnings before interest, tax, depreciation and amortisation (EBITDA) at ₹1,362 crore. EBITDA margins at 14% improved by 250 bps over the corresponding quarter previous year, aided by commodity cost, leap savings, premiumisation and judicious price changes.
Hero Motocorp said it expects a double-digit revenue growth in FY25 led by gain in the 125 cc segment with the launch of Xtreme 125R, ramp-up of premium motorcycle portfolio and electric vehicle (EV) market share gain on the back of new launches.