Hero MotoCorp Ltd. share price target

monitorables. Sustenance of market share will remain key to growth. Management is hopeful of improved retails in the upcoming festive season as well as pre-buy ahead of BSVI. The industry continues to lobby for lower GST rates on 2Ws to aid demand. As Hero has rolled out new...

For Q1FY2020, Hero MotoCorp Limited's (Hero) performance came inline with our expectations. The 2W industry's wholesales declined by 12% in Q1FY2020. While the industry's retails dropped by 6%, Inventory correction by OEM led to a sharper drop in wholesales. Industry inventory continues to remain high at six weeks, which along with weak consumer sentiments would continue to impact demand. We expect the 2W industry to drop in FY2020. Margin contraction due to operating deleverage and increased depreciation charges on account of scrapping of old BS4 machinery would lead to double-digit earnings drop for Hero in FY2020....

Hero Motocorp's Q1FY20 performance was in-line, with EBITDA margins at Change in Estimates | Target | Reco 14.4%, lower 120bps YoY but up 80bps QoQ. The sustenance of margins at current levels to continue led by commodity tailwinds in coming quarters....

Attractive Valuation to Own Strong Company; Upgrade to BUY Hero MotoCorp (HMCL) has delivered better-than-expected performance in 1QFY20 with its operating margin coming in at 14.4% vs. our estimate of 13.6%, declined by 121bps YoY (+86bps QoQ). Its revenue fell by 9% YoY (+2% QoQ) to Rs80.3bn (vs. our estimate Rs81.7bn), while EBIDTA decreased by 16% YoY (+8% QoQ) to Rs11.6bn due to higher other expenses. EBIDTA margin contracted by 121bps YoY on account of limited ability to pass on higher input cost amid intensified competition. Its ASP improved by 4% YoY due to price hike for implementation of safety norms. HMCL's adjusted PAT declined by 14% YoY (+8% QoQ) to Rs7.86bn surpassing...

Op. performance above expectations on lower cost; expects recovery in 2H Margins above estimates; higher depreciation drags PAT: Revenue declined 9% YoY to INR80.3b (our estimate: INR81b). Realizations were up 4% YoY to INR43.6k (our estimate: INR43.9k) led by price hikes; however, lower spare sales hurt realizations sequentially (-1.6% QoQ). EBITDA declined 16% YoY to INR11.6b (our estimate: INR10.8b), with the margin expanding 80bp QoQ (120bp YoY) to ~14.4% (our estimate: 13.3%). Higher depreciation restricted adj. PAT to INR7.2b (in-line; -21% YoY). Earnings call highlights: (a) Retail volumes declined 6% in 1Q. Inquiry levels...

We attended Hero MotoCorp's (HMCL) analyst meet where management reiterated its dual focus of making inroads into the premium segment and retaining its hold on the deluxe segment. While acknowledging immediate concerns from higher insurance costs, new ABS/CBS norms and cramped liquidity, HMCL believes India's macro climate is favourable. Management also remains optimistic on exports and expansion into newer markets....

Hero MotoCorp Analyst Meet shared medium to long-term vision for the Change in Estimates | Target | Reco Indian 2W market and HMCL's strategy. The management remains optimistic about long term 2W demand scenario and expects HMCL to be the key...

We attended Hero MotoCorp's (HMCL) analyst meet where management reiterated its dual focus of making inroads into the premium segment and retaining its hold on the deluxe segment. While acknowledging immediate concerns from higher insurance costs, new ABS/CBS norms and cramped liquidity, HMCL believes India's macro climate is favourable. Management also remains optimistic on exports and expansion into newer markets. Macro climate favouring long-term industry growth: HMCL is optimistic on growth prospects of the 2W industry in the mid-to-long term, underpinned by...

We met Mr. Niranjan Gupta (CFO), Mr Sanjay Bhan (Head- Sales) and Mr Malo Le Masson (Head - Global Product Planning) of Hero MotoCorp (HMCL) ( Link) to get an update on the (a) long-term growth potential of the domestic 2W industry, (b) product positioning in the 125cc Scooter and Premium motorcycle segments, (c) company's strategy and preparedness for BS-VI regulations, and (d ) the scale-up in the global business.

In Q4FY19,revenue fell by 8% YoY to Rs7,884 cr due to fall in volume growth by 11% . Realisation improved by 3.5% despite the volume drop for the quarter. PAT declined by 25%. Management commented single digit growth in H1FY20 and growth to recover in double digit from H2FY20. Company is planning to launch two new vehicles Maestro Edge in the scooter segment and Xpulse in the motorcycle segment by next month. We expect the volume growth to improve...