The stock is trading at an attractive valuation of 14.2x on FY20E and it offers a dividend yield of ~3.4%. At this valuation, the risk reward is favorable. We have a BUY rating on the stock, with a TP of Rs 3,080 (16x FY21 EPS). Hero upping the ante in the premium segment: Hero has launched a range of premium 200cc bikes as it addresses white spaces in its portfolio. The OEM has been practically absent from the premium segment, post its split with Honda in 2010. The new launches reflect Heros commitment to gain market share in the high end segment, which accounts for ~20% of the overall motorbike market. By offering a complete portfolio, Hero will be better able to withstand competition as other OEMs have been increasing competitive intensity in the entry level segment. Also, these launches will enable the market leader to retain market share at 50% in the overall bike segment, in our view.