14 August 2020 HMCL has posted a notable operating performance in these tough times. The narrative around rural demand is positive, but supply chain ramp-up and broad-base demand are important for demand sustainability. We upgrade our EPS estimate by 9% for FY21 to factor faster volume recovery. But, we maintain our Neutral rating, with TP of INR3,045 (~16x Sep22 S/A EPS + INR98/share for Hero FinCorp). Revenues fell 63% YoY to ~INR29.7b on a ~69% YoY decline (-58% QoQ) in volumes. Realizations increased 21% YoY (+12.8% QoQ) to INR52.7k (v/s est. of INR48.9k), driven by BS6-related price increases and no discounts. didnt load contribution margins on the BS6 cost pass-through. Lower other expenses supported EBITDA margins to 3.6% (v/s est.