Hero MotoCorp Ltd. share price target

Retail sales have been consistently improving on m-o-m basis. Early August trends also indicate improvement over July levels. Inventory is lower than normalised levels and Hero is ramping up...

While 1QFY21 PAT was weak at Rs 613mn (-90% YoY), the management highlighted that demand is back to pre-COVID level in 2QFY21. Hero has gained market share in the quarter, led by rising demand in rural/semi-urban markets and ramp-up in production. The OEM's foray into the premium segment has got off to an encouraging start, and it is targeting double-digit market share in it. We reiterate BUY (please see our recent note: 'Xtreme'...

Hero MotoCorp (HMCL) delivered a Q1FY21 revenue beat but disappointed on earnings due to lower operating efficiencies.

The momentum is expected to continue. Green shoots are clearly visible with operational performance, c) higher other income and d) exceptional gains of Rs760mn. 2HFY20 sustainability of return of demand. Hero's focus on fast filling white spaces (Premium + is expected to be better than 1HFY20 with reasonable growth in exports and presence of levers Scooters + Exports), along with rural uplift would result in outperformance as compared to the...

HMCL remains our preferred play in autos on domestic demand revival led by increasing preference towards personal mobility due to safety needs and pick up in rural volume. Strong product portfolio in entry and executive segments with more than 60% shares, deep rural/semirural network reach (rural contributes to 50% volume), and strong supply chain management are key positives. We recognize the company's efforts to increase its overall market share (+500bps YoY to 41.6%) in 2W space. The company preempted pent-up demand after lockdown and readies operations to meet the same. As supply situation is much better compared to its...

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.

Target saving of ~100bp in FY21 from LEAP 2 program (v/s 60bp in FY20). HMCL's Q1FY21 performance was mixed with realizations beat at Rs52.7k/unit (PLe Rs48k/unit) offset by lower gross margins at 29.5% (PLe 32%). The management indicated sustenance of current demand momentum led by rural as well as shift towards personal mobility. With increased focus on cost control measures such as LEAP 2 (target savings of 100bp v/s LEAP 1 saving of ~50bp) in addition to recovering volumes, HMCL is better placed...

Hero Motocorp (HMCL) in its FY20 annual report, throws light on certain key aspects with regards to Covid-19 induced near term uncertainty on its business operations as well change in key trends. On the other hand, certain optimism is displayed due to certain factors such as potential recovery in semi urban/rural areas, increasing preference towards personal mobility due to safety needs and pent up in underlying demand. As incomes are affected due to the pandemic, downgrading is being witnessed, which may push up growth in the entry-level bike segment,...

FY2020 was a challenging year for the two-wheeler (2W) industry, with volumes dropping by 18% y-o-y, impacted by increased cost of ownership, NBFC liquidity crisis, and lack of income growth. While the industry is facing short-term challenges on account of COVID-19, long-term growth factors are intact. Moreover, Hero MotoCorp (Hero) expects industry demand to recover as early as H2FY2021, driven by buoyancy in rural sentiments, pent-up demand, and preference for personal transport to ensure safety in post-COVID era. Hero's focus on...

Revenue from operations during the quarter under review stood at Rs 6,333.51 crore as against Rs 7953.10 crore in the same quarter a year ago. The company said it sold 1,323,000 twowheeler units during the quarter. OPM of the company stood at 10.63% compared to 13.97% in Q4FY19. As a result operating profits reported profit of Rs 673.25 crore compared to profit of Rs 1110.84 crore. Other income fell 19% to Rs 157.03 crore. Interest cost down by 11% to Rs 10.13 crore. Depreciation rose...