For Q1FY2020, Hero MotoCorp Limited's (Hero) performance came inline with our expectations. The 2W industry's wholesales declined by 12% in Q1FY2020. While the industry's retails dropped by 6%, Inventory correction by OEM led to a sharper drop in wholesales. Industry inventory continues to remain high at six weeks, which along with weak consumer sentiments would continue to impact demand. We expect the 2W industry to drop in FY2020. Margin contraction due to operating deleverage and increased depreciation charges on account of scrapping of old BS4 machinery would lead to double-digit earnings drop for Hero in FY2020....