SALES PERFORMANCE

HERO HONDA REPORTS LEADERSHIP PERFORMANCE WITH 50

% NET PROFIT IN Q2, '08-09
DEFIES INDUSTRY TREND WITH TURNOVER (NET SALES &
OTHER OPERATING INCOME), AT RS. 3202 CRORE; EBIDTA AT
13.58 PER CENT
Aug'06 Aug'07 FY 06-07 FY 07-08
Total Sales 2,15,076 2,40,875 12,82,860 12,63,254

Highlights of Q2, FY'08-09

• Total turnover(Net sales & Other Operating income)Rs 3202 crores,

growth of 35.6 per cent
• Net profit after tax at Rs 306.30 crores, growth of 50 per cent
• EBIDTA margin for the quarter 13.58 per cent
• Total sales for Q2 stands at 9,72,095 units, growth of 28.5 per
cent
• Total sales for H1 stands at 18,66,349, growth of 19.7 per cent
• Over 55 per cent share in domestic motorcycle market
• Launches first-of-its kind music video to celebrate 25 years of Hero
Honda

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML),
the world's largest two-wheeler company for seven consecutive
years, today firmly reiterated its undisputed leadership in the
domestic two-wheeler market with impressive bottom line growth for
the second quarter (Q2) – July to September - of this financial year
(FY) 2008-09.

Even as the industry continued to face tough market conditions on

account of uncertainty over interest rates and overall credit squeeze,
the company reported 50 per cent growth in profit after tax (PAT) at
Rs 306.30 crore for the second quarter. Hero Honda's profit after tax
in the corresponding period last fiscal (July - Sept, 2007-08) stood at
Rs 204.33 crore.

Total turnover (Net sales & Other Operating income) grew to Rs 3202
crore, a growth of 35.6 per cent over Rs 2361 crore recorded in the
corresponding period last fiscal. The company has recorded an
EBIDTA margin of 13.58 per cent in the quarter. The EBIDTA margin in
the previous quarter (April - June '08) was 12.20 per cent.

The strong financial performance is in line with the company's better-

than-industry top line growth. After posting a growth 11.38 per cent
in the first quarter, the company kicked off the second quarter with a
39.8 per cent growth in sales in the month of July, and followed up
with 26.8 per cent growth in August and 22.4 per cent in September.
Hero Honda consistently keeps growing its share in the domestic
motorcycle market, and currently enjoys over 55 per cent share.

Hero Honda's cumulative sales for the second quarter (Q2) this FY
stands at 9,72,095 units - a growth of 28.5 per cent over Q2 last FY
(2007-08). The cumulative sales for the first six months (H1) stands
at 18, 66,339 units of two-wheelers compared to 15, 59,486 units
sold in H1 in the last FY – reflecting a consistent 19.7 per cent growth
in cumulative sales.

Dr. Brij Mohan Lall, Chairman, Hero Honda Motors Ltd, said
"We are happy with our financial performance. It gives immense joy
to see this kind of results in the 25th year of our company. I wish to
thank all our stakeholders – customers, associates, dealer friends,
ancillaries and also our joint venture partners Honda Motors Co – for
their continuous support."

Mr. Pawan Munjal, MD & CEO, Hero Honda Motors Ltd., said
"Our numbers speak for themselves. Even in this volatile and
competitive environment, our top line continues to outpace the
industry growth, our market share is at an all time high, and the
financial balance sheet is a delight – all the factors which form the
hallmark of a resilient company with cutting-edge management. We
will continue to keep innovating – in bringing in technologically-
superior products, in our network expansion, in brand building, in our
financial management, and in our communication."

"Going forward, we will have to keep a close watch on the commodity

prices movement, and other factors such as inflation, interest rate
scenario and availability of retail finance. These factors will play a
crucial role in the industry growth in the subsequent quarters," he
added.

Hero Honda has already rolled out its festive season initiatives, with
the launch of four new models – the all-new "Passion Pro" and three
refreshes of its existing models - new CBZ X-treme, a self–start
version of Splendor NXG and the refreshed Pleasure. During
the coming months, the company will further augment its product
portfolio with new launches across segments.

Key Hero Honda brands continue to drive strong volumes across

segments - CD Deluxe in entry segment, Glamour, the new Splendor
NXG, Splendor + and Passion Plus in deluxe segment, and Hunk, CBZ
X-treme and Karizma in the premium segment.

Celebrating its 25th year, Hero Honda released an innovative music

video in the month of September. Titled "Hero Honda Dhak Dhak Go",
and involving as many as eight brand ambassadors of Hero Honda,
the music video has been receiving rave reviews.

Hero Honda recently won two very coveted awards - "The Most
preferred Brand of two-wheelers" award at the recent CNBC Awaaz
Consumer Awards 2008, and the "NDTV Profit Business Leadership
Award".