10 June 2020 HMCL posted a weak operating performance (even on an adjusted basis) due to weak volumes and one-off costs. Near-term margins would remain under pressure due to BS6-related impact, a possible adverse mix, and op. We marginally downgrade our EPS, but maintain our Neutral rating, with TP of ~INR2,350 (~15x Mar22 EPS+INR97/share for Hero FinCorp). HMCLs revenues/EBITDA/PAT declined 21%/38%/15% YoY in 4QFY20, and 14%/19.7%/10% in FY20. Revenues declined ~21% YoY to ~INR62.4b on ~25% YoY decline (-13% QoQ) in volumes. Realizations increased 5.6% YoY (+2.9% QoQ) to INR46.7k, despite BS4 discounts (INR1.1b), driven by BS6-related price increases. incentives (~80bp), and c) obsolete BS4 inventory. Also, impact from passing BS6 cost was reported, without the loading of contribution margins.