Hero MotoCorp Ltd. share price target

Hero MotoCorp's (HMCL) Q3FY21 operating performance beat estimates due to above-expected gross margins.

volumes, revenues, operating profits and realizations. Volumes grew by 9% yoy and 1.4% qoq to models and low base of last year when BS 6 was playing as a dampener. The demand in Q3 was strong on the back of festive period and pent up demand rising post lifting up of lockdown. Input...

Our interaction with Hero MotoCorp's (HMCL) management indicated that the structural growth traction in the two-wheeler (2W) industry remains intact. HMCL continues to benefit from premiumisation of its products, its stronghold in the economy and executive motorcycle segments, and aggressive products offerings in premium bike and scooters segments. HMCL is a market leader in the Indian 2W industry, commanding a ~38.5% share. The company commands ~65% market share in the combined economy and executive motorcycle segment, which together makes up 80% of the motorcycle market size in India. HMCL has strong penetration in semi-urban and rural areas, aided by its largest distribution network...

Domestic auto industry volumes have been on a steady mend in the months post lifting of lockdown restrictions. Manufacturing and distribution activities have been getting ramped up gradually since June 2020, in step with the rest of the economy. However, the impact of the pandemic on the supply chain continues to inhibit a complete return to production normalcy. Nevertheless, most automotive industry segments have reported successive improvement in offtake throughout June-November 2020 (Exhibit 1) on the back of (i) initial bounce provided by pent-up aspect,...

Hero MotoCorp is the world's largest 2-wheeler company.

Hero records highest ever sales, PAT soars Hero MotoCorp (HMCL) is India's leading two-wheeler manufacturer in terms of unit volume sales in a calendar year. It holds nearly 50% of the market share in the Indian motorcycle market. The company has eight...

Current tax expense jumped 18.7% year-on-year to Rs 255.27 crore in Q2 September 2020. Volumes grew 7.7% to 18.22 lakh units sold in Q2 FY21 over Q2 FY20. EBITDA jumped 16.80% to Rs 1286 crore in Q2 September 2020 as against Rs 1101 crore in Q2 September 2019....

HMCL is in a sweet spot as strong rural-led recovery plays to its strength in the EconomyExecutive category in the Motorcycles segment. We maintain our BUY rating and TP of Rs. 3,450 and continue to value the stock at 16x its FY23E EPS.

Hero MotoCorp (HMCL) Q2FY21 result was above our and consensus estimates on all parameters. Revenue was higher than our and consensus estimates mainly on account of higher realisation while EBITDA margin for the quarter stood at 13.7% vs our and consensus estimates of 13.2%/ 13.7% respectively mainly on account of lower operating expenses. Our channel check indicates that first 10 days of festive season for retail sales was not as good as wholesale sales. We expect inventory levels at dealer's end to remain high by end of the festive season. We believe urban pocket to remain under pressure due to pandemic outbreak, negative sentiment and higher...

Hero MotoCorp (HMCL) reported a strong set of Q2FY21 numbers. Total 2W sales volume for the quarter came in at 18.2 lakh units, up 7.7% YoY. Consequent net sales were at | 9,367 crore, up 23.7% YoY. Blended ASPs were at | 51,412/unit, a rise of ~15% YoY (courtesy BS-VI transition). EBITDA margins at 13.7% were down 80 bps YoY. The margin performance was impacted by a rise in raw material cost but employee and other expenses declined on a percentage of sales basis by 70 bps and 190 bps, respectively. Consequent PAT came in at | 953.5 crore (up 9% YoY). Lower...