Hero MotoCorp Ltd. share price forecast

Bata India: Bata's Q1 performance recovers pre-pandemic sales. Alas! It falls short on expectations (INR9.4bn; vs HSIE: INR9.6bn). On a relative basis too, Bata continues to disappoint. Its three-year CAGR, at 2%, falls meaningfully short vs immediate peer Metro's 18%. EBITDAM missed estimate despite a GM beat as normalisation in cost of retailing outpaced sales recovery. We've highlighted in our IC note too that treading the growth-margin equation across Bata's volume drivers is likely to be tough to execute. We maintain our SELL recommendation with an unchanged DCF-based TP of INR1,400/sh, implying 38x Jun-24 P/E. (FY24/25 EPS estimates change: -3/-1% respectively). TCNS Clothing: TCNS' journey to pre-pandemic sales remains underwhelming, partly due to category-specific idiosyncrasies. Q1 was better than expected but lagged peers (Trent/Madura clocked 29/14% three-yr CAGR). Revenue, at INR2.76bn (HSIE: INR2.51bn), just about hit pre-pandemic sales level. However, offline channels' performance (esp. their sales densities) remains sub-par, unlike peers. TCNS Clothing seems to have taken refuge in higher GM to partly cushion the impact of increasing channel incentives on profitability. We revise down our FY24/25 EBITDA estimates by ~10/9% respectively to account for higher S&D expenses. Maintain our SELL recommendation with a revised DCF-based TP of INR510/sh, implying 20x Jun-24 EV/EBITDA. Dilip Buildcon: Dilip Buildcon (DBL) reported revenue/EBITDA/PAT of INR 26.2/2.1/0.07bnEBITDA a miss, while revenue/APAT beat our estimates. EBITDA margina tad low at 7.8%continues to remain under pressure on account of higher raw material prices/time and cost overruns on legacy projects (impacted by COVID-19 delays). The order book (OB), as of Jun'22, stood at...

We maintain our BUY rating on the stock on the back of reasonable valuations and revise our TP to Rs 3,060/share (Rs 3,000 earlier). We value the stock at 15x FY24E EPS, implying an 11% upside from the CMP.

Hero MotoCorp’s (HMCL) Q1FY23 EBITDA margin, at 11.2% (flat QoQ), missed consensus estimate of 12.5% and revenue of Rs 84bn, up 13% QoQ, was less than consensus estimate of Rs 87bn.

Hero Motocorp: HMC's Q4 earnings were broadly in line with our estimate, at INR6.3bn, as higher-than-expected other income offset the slight miss in EBITDA margin. Management expects the 2W industry to post double-digit growth in FY23 on the back of favourable indicators that include marriage season demand, good festive demand in key regions in April, and positive rural sentiment on the back of healthy crop output. We expect HMC to gradually recover its lost market share in motorcycles over the next 2-3 years, led by: (1) gradual economic recovery driving consumption from the mid-to-low income consumers a key segment for HMC and (2) revival in rural economy. In the premium segment, HMC targets to double its market share to 10% in the coming years, planning at least one launch a year for the next 3-4 years. Even in exports, it seems to have got its act right, having grown by 57% YoY in FY22, albeit on a low base; it targets to ramp up export contribution to 15% of total sales in the next four years. Market share revival in domestic motorcycles and ramp-up in exports are likely to be the key upside triggers for the stock. At 12.4x FY24 PER, the valuation is attractive. We maintain BUY, with a TP of INR2,825/sh. KEC International: KEC reported a muted quarter, with revenue at INR 42.8bn, driven by non-T&D segments. EBITDA margin, at 5.9%, was affected, mainly by rising raw material prices, higher logistic cost, geopolitical situations, supply chain issues and losses in SAE. With the highest...

We maintain a BUY rating on the stock given its reasonable valuations and revise our TP to Rs 3,000/share (Rs 3,150 earlier) to factor in near-term headwinds for the 2W industry. We value the stock at 15x FY24E EPS, implying a 24% upside from the CMP.