Two-wheeler manufacturer Hero MotoCorp on Wednesday said that the company will be increasing the price of select scooters and motorcycles by around 2% from April 1. According to the company, the decision has been necessitated mainly due to cost increases on account of the "OBD 2 transition."

"Hero MotoCorp will continue to provide innovative financing solutions in order to cushion the impact on the customers. The price revision will be around 2%  and the exact quantum of increase will vary by specific models and markets," the company said.

Following the development, shares of Hero MotorCorp on Thursday, surged as much as 1.2% to hit an intraday high of ₹2,384.00 apiece on the BSE. On Thursday, shares of Hero MotoCorp opened a tad higher on the BSE at ₹2,360 as against the closing price of ₹2,354. During the session, the market capitalisation of the company stood at ₹47,275 crore with as many as 7,152 shares exchanging hands on the BSE against the two-week average of 0.20 lakh shares.

This is the second time in four months that the country’s largest two-wheeler company has hiked prices. Earlier in December, the company hiked the prices of motorcycles by up to ₹1,500. Hero MotoCorp had attributed overall inflationary costs as the reason for increasing vehicle prices. Notably, in July and September last year, the company hiked prices by up to ₹3,000 and ₹1,000 respectively, owing to a rise in input costs.

In February this year, the company reported a 10% increase in sales to 3,94,460 units as against 3,58,254 units in the same period last year. Of this, motorcycle sales registered a growth of 9.8% at 3,71,854 units as against 3,38,454 units in February 2022. Scooter sales registered a growth of 14% at 22,606 units in February as against 19,800 units in the same period last year. However, despite double-digit growth in sales, the company registered a decline of 54% in two-wheeler exports at 12,143 units as against 26,792 units in February 2022.

"The rural markets have been witnessing an upswing in demand, thanks to the government schemes in the social sector and healthy agricultural outputs. This augurs well for the industry as the growth momentum is expected to lead into the upcoming festive season towards the latter half of the fiscal," the company said.

During the quarter-ended December 31, 2022, Hero MotoCorp registered a surge in consolidated profit by 2.41% year-on-year (YoY) at ₹721.24 crore. The company’s income increased by 2,05% in the December quarter to ₹8,300.3 crore. The company’s EBITDA (earnings before interest tax, depreciation and amortisation) for the December quarter stood at ₹924 crore. 

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.