Deferred tax drags down Honda FY24 profit by 53%

Honda Cars India (HCIL) net profit dropped by 52.8 per cent year-on-year (Y-o-Y) to ₹661.4 crore in 2023-24 (FY24), primarily due to deferred tax of ₹359.8 crore, according to the annual results submitted to the Registrar of Companies (ROC) and reviewed by Business Standard.

- DEEPAK PATEL

In FY24, the company's production increased by 16 per cent Y-o-Y to 134,807 units.

Profit before tax (PBT) in FY24 stood at ₹1,029.6 crore, which is 24.7 per cent higher.

During the two Covid-affected years of FY20 and FY21, the company's net loss stood at ₹1,672.2 crore and ₹1,587.5 crore, respectively, according to documents. Consequently, it had zero deferred tax in FY22.

"As at April 1, 2022, the company had significant unabsorbed depreciation and carry forward business losses in accordance with the Income Tax Act, 1961. In view of the absence of reasonable certainty of sufficient future taxable profits, deferred tax assets had been recognised to the extent of deferred tax liability only," the company stated in its RoC documents.