Hero Motocorps (HMCL) 4QFY17 EBITDA at Rs 9.57bn (-19.5% YoY) came in below estimates, led by a poor model mix, higher RM cost and discounts offered to clear the BS3 inventory. PAT at Rs 7.2bn (-14% YoY) was affected by a lower operating margin (13.8%, -200bps YoY). The drop in the 4Q margin is a one-time impact, owing to the ban on BS3 vehicles.