Maintain BUY as (1) Industry demand has improved after several quarters of decline (2) Hero has successfully defended market share in the 2W segment in the current downturn. (3) The stock is trading at attractive valuations of 16.1x on FY20E estimates and offers a dividend yield of ~3.2%. Co has healthy return ratios with an ROE of 24%. Key Risk: Sharper than expected increase in BSVI product prices. Heros 2QFY20 EBITDA margin was flat QoQ at 14.5% despite weak volumes. Co is witnessing a growth in retail sales in the festive season after several quarters of decline. Reiterate BUY, with a TP of Rs 3,460 (18x Sep-21 EPS).