Hero MotoCorp Ltd. share price target

Hero MotoCorp reports 92% drop in Q1 PAT, misses estimates On a consolidated basis, the two-wheeler maker's net profit tumbled 95.3% to Rs 59.14 crore on a 63.7% decline in net sales to Rs 2,969.08 crore in Q1 FY21 over Q1 FY20. EBITDA fell 90.7% to Rs 108 crore in Q1 June 2020 from Rs 1,158 crore in Q1 June 2019. EBITDA margin was at 3.6% as on 30 June 2020 as compared to 14.4% as on 30 June 2019. Profit before tax in the June quarter stood at Rs 79.49 crore, down by 95.8% from Rs 1873.83...

Hero MotoCorp (HMCL) Q1FY21 result was above our estimates on all parameters. Revenue was higher than our estimates on account of higher realisation while EBITDA stood at Rs1.08bn vs our estimated loss of Rs1.5bn due to substantially lower operating expenses. We believe lower COVID cases in rural areas, strong rural/semi urban economy, timely monsoon and preponement of affordable personal mobility has been in favour for HMCL in these tough times. However we are also seeing urban pocket to remain under pressure due to pandemic outbreak, negative sentiment and higher unemployment which would impact HMCL urban sales. We expect consumer spending...

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,...