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Hero MotoCorp Gets Additional Tax Demand of ₹26.4 Crore

Updated on: Jan 2, 2025, 3:24 PM IST
The Income Tax Department has issued an additional tax demand of ₹26.40 crore to Hero MotoCorp Ltd for the 2020-21 assessment year.
Hero MotoCorp Gets Additional Tax Demand of ₹26.4 Crore
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Hero MotoCorp Limited, headquartered in New Delhi, India, proudly holds the title of the world’s largest two-wheeler manufacturer, celebrated for its exceptional motorcycles and scooters. Established in 1984 as Hero Honda, the company underwent a historic rebranding in 2011, evolving into Hero MotoCorp following its amicable separation from Honda. 

Additional Tax Demand

On 1 January 2025, Hero MotoCorp announced that it had received an additional tax demand of ₹26.40 crore from India’s Income Tax Department for the assessment year 2020-21. The order, issued on 31 December 2024 by the Deputy Commissioner of Income Tax, Central Circle 27, New Delhi, followed a detailed examination of the company’s income tax return filed on 31 December 2020.

Hero MotoCorp Statement 

The tax officer’s assessment resulted in an addition of approximately ₹96.5 crore to Hero MotoCorp’s reported income, leading to the additional tax liability. In a regulatory filing, the company emphasised that it is currently reviewing the order and will undertake all necessary steps, including filing appeals and rectification applications. 

The management firmly believes the demand is unsustainable and does not foresee any significant impact on the company’s financial health, operations, or overall activities.

Hero MotoCorp’s Q2 FY25 Performance

Hero MotoCorp reported its Q2 FY25 financial results amidst a challenging economic backdrop. The company achieved revenue of ₹9,538 crore, reflecting a modest year-on-year growth of 1.5%, driven by consistent demand for its diverse two-wheeler portfolio.

However, profitability came under strain, with the EBITDA margin narrowing to 11.2%, compared to 13% in the corresponding quarter of the previous year. This contraction was attributed to elevated input costs and subdued rural demand. Net profit for the quarter stood at ₹880 crore, representing a 7.5% decline compared to Q2 FY24.

Share Price Performance 

Hero Motocorp Ltd. share was traded at ₹4,312.00 at 2:21 PM on NSE where stock is more than 3% up.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 2, 2025, 3:24 PM IST

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