Hero MotoCorp Ltd. share price target

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...

Hero MotoCorp reported weak performance during Q4FY20 with a 20.9% YoY fall in revenue to Rs 62,384 mn was impacted due to disruptions caused by covid-19 in late March. It had reported a revenue of Rs 78,850 mn in the corresponding quarter last year. Profit of the company declined by 15% YoY to Rs6207 mn in Q4FY20 while on a sequential basis profit fell by 29.50%.EBITDA stood at Rs 6599mn down by 38.3% YoY for the Q4FY20 as compared to Rs 10,693 mn for the Q4Y19. EBITDA margin narrowed to 10.6% in Q4FY20 as compared to 13.6% in Q4FY19. The two-wheeler major...

Demand to improve gradually, bracing for a stronger FY22 Margins impacted by one offs, otherwise numbers in line with expectations Topline de-grew by 20.9% yoy as volumes saw 25.7% yoy fall, while realizations grew by 5% on...

Hero MotoCorp reported weak performance during Q4FY20 with a 20.9% YoY fall in revenue to Rs 62,384 mn was impacted due to disruptions caused by covid-19 in late March. It had reported a revenue of Rs 78,850 mn in the corresponding quarter last year. Profit of the company declined by 15% YoY to Rs6207 mn in Q4FY20 while on a sequential basis profit fell by 29.50%.EBITDA stood at Rs 6599mn down by 38.3% YoY for the Q4FY20 as compared to Rs 10,693 mn for the Q4Y19. EBITDA margin narrowed to 10.6% in Q4FY20 as compared to 13.6% in Q4FY19. The two-wheeler major...

High rural slate to help consolidate market share HMCL is the market leader in the domestic motorcycle space, commanding ~52% market share, as of FY20. We expect the motorcycle sub segment to be among the frontrunners of post Covid recovery on account of (1) higher share of sub segment sales in rural economy, which has been less exposed to the pandemic outbreak and currently holds more stable income prospects courtesy remunerative Rabi crop prices and expectations of a normal monsoon and (2) increasing preference for private transport amid...

Hero MotoCorp (HMCL) posted an operationally weak Q4FY20 performance led by poor gross margins and one-off dealer support via discounts.

10 June 2020 HMCL posted a weak operating performance (even on an adjusted basis) due to weak volumes and one-off costs. Near-term margins would remain under pressure due to BS6-related impact, a possible adverse mix, and op. We marginally downgrade our EPS, but maintain our Neutral rating, with TP of ~INR2,350 (~15x Mar22 EPS+INR97/share for Hero FinCorp). HMCLs revenues/EBITDA/PAT declined 21%/38%/15% YoY in 4QFY20, and 14%/19.7%/10% in FY20. Revenues declined ~21% YoY to ~INR62.4b on ~25% YoY decline (-13% QoQ) in volumes. Realizations increased 5.6% YoY (+2.9% QoQ) to INR46.7k, despite BS4 discounts (INR1.1b), driven by BS6-related price increases. incentives (~80bp), and c) obsolete BS4 inventory. Also, impact from passing BS6 cost was reported, without the loading of contribution margins.

Target saving of ~100bp in FY21 from LEAP 2 program (v/s 60bp in FY20). HMCL's Q4FY20 performance was in-line with revenue/EBITDA/PBT while margins came in lower at 10.6% (-300bps YoY, PLe 11.4%) led by contraction in gross margins, negative operating leverage and higher dealer support to...

prevented a steep decline in the bottom line which was down by 15% YoY to Rs 6.2bn operational performance, c) higher other income and d) exceptional gains of Rs760mn. 2HFY20 vs. est. of Rs 4.4bn. Further lower scale of operation in FY21e to impact the margin, while is expected to be better than 1HFY20 with reasonable growth in exports and presence of levers Hero's Leap-II program along with soft commodity prices would provide some support. A...

Rural slate forms > 50% of HMCL volumes. The company is the undisputed leader in the domestic motorcycle segment (a predominantly rural product), commanding 52% market share in the space as of FY20. In a post-Covid-19 world, enhanced awareness around social distancing (pan India basis) and apprehension around usage of congested public transport (largely relevant to urban, metro areas) are seen acting as a tailwind for lower ticket priced means of private transport, including entry and mid-level motorcycles (75125 cc). Consequently, HMCL's leadership in 75-110 cc products (Splendor, HF Deluxe & Passion) and 110-125 cc products (Glamour, Splendor 125)...