Hero MotoCorp Ltd. share price target

Hero MotoCorp (HMCL) Q4FY21 result was above our and consensus estimates on all parameters. Revenue was higher than our and consensus estimates mainly on account of higher realization, favorable product mix and higher spare part revenue. We believe recent lockdowns announced by different states would impact wholesale demand in H1FY22 however government focus on vaccination program and unlocking 2.0 would help industry/ company to report strong numbers in H2FY22. We expect domestic 2W industry to see a double growth for FY22 on a low base. We do not expect any significant improvement in export sales for HMCL and wait for turnaround. We cut our...

Hero MotoCorp's (HMCL) Q4FY21 operating performance was marginally ahead of our estimates due to an above-expected gross margin.

Hero MotoCorp (HMCL) reported a robust Q4FY21 performance. Total 2-W sales volume was at 15.68 lakh units, up 18% YoY, down 15% QoQ. Consequent net sales in Q4FY21 came in at | 8,686 crore, up 39.2% YoY but down 11.1% QoQ with blended ASPs at ~| 55,395/unit (up 4.6% QoQ). EBITDA margins were down 50 bps QoQ at 13.9%, with gross margins expanding 10 bps QoQ despite a spike in input costs over the past few months. PAT came in at | 865 crore, up 39.3% YoY. HMCL declared a final dividend of | 25/share for FY21 along with a special dividend of | 10/share....

HMCL's Q4FY21 results beat our estimates as EBITDA/Adj. PAT were better by 6-12%. This was led by higher gross margins at 29.6% (PLe 28.9%) and lower other expenses at Rs8.7b (PLe Rs9.1b). We believe headwinds such as weak demand sentiments and RM would get mitigated by HMCL's increased focus on cost control (expect LEAP 2 savings of 200bp in FY21 to continue in FY22) and price hikes. We tweak FY22/23 EPS by +3%/-2% to factor in for...

Hero reported strong set of numbers in Q4. Volumes grew by 18.5% yoy while fell by 15% qoq to 1.57 mn units, while topline grew by 39.2% yoy to 86.86 bn as realizations witnessed a fantastic expansion of 12% yoy mainly on price hikes taken in Q4, model mix tilting towards big ticket models and low base of last year when BS 6 was playing as a dampener. The demand in Q4 remained strong even after the best quarter of Q3. Input costs to sales remained flattish sequentially at 70.4% despite commodity prices moving up by 5%. This was a big surprise for the street as other auto players were unable to arrest this surge. Due to this impact, EBITDA margins surged to 13.9%, while rising from 10.6% yoy and slightly falling qoq. The company managed the...

Hero MotoCorp Posts Above Estimates Q3 Numbers The country's largest two-wheeler maker Hero MotoCorp has posted a 13.7% increase in its consolidated profit after tax at Rs 1,019.18 crore for the third quarter ended December 31, 2020. The company had reported a consolidated net profit of Rs 901.81 crore in the October-...

We maintain our BUY rating on the stock and have revised our TP to Rs 3,850 (from Rs. 3,450 earlier) valuing the stock at 17x its FY23E EPS.

Hero MotoCorp (HMCL) Q3FY21 result was above our and consensus estimates on all parameters. Revenue was higher than our and consensus estimates mainly on account of higher realization, favorable product mix and higher spare part revenue. We believe positive macro factors, vaccination program in place, more cities opening up are improving sentiments for good retail demand. We expect domestic 2W industry to see a double growth for FY22 on a low base. We do not expect any significant improvement in export sales for HMCL and wait for turnaround. We build our volume growth estimates for FY21/FY22/FY23 by -10%/+15%/+12% factoring the strong recovery in 2W...

HMCL's Q3FY21 was operationally better with beat at EBITDA/PAT by ~10/13% respectively led by higher gross margins at 29.5% (PLe 28.7%) and lower other expenses at Rs9.5bn (PLe Rs9.9bn). Market share expansion continues with ~190bp gains in domestic markets and ~90bp gains in exports. While soft retails and RM pressures are near term headwinds, increased...

While the demand scenario is favourable, prevailing sharp increase in input costs are set to pressurise gross margins over the medium term in our view. While HMCL has undertaken price increases to pass on some escalations, we believe further hikes are likely to be gradual so as to not arrest ongoing demand recovery. The company's cost control programme LEAP 2 delivered ~100-125 bps savings in Q3FY21 and remains a powerful mitigation tool to offset some of the increases, however. We build in benefits of operating leverage over FY21E-23E as well as elevated raw material costs...