Hero MotoCorp Ltd. share price target

Maintain BUY with TP of Rs 3602(16x Sept-20E EPS). Hero Motocorps (HMCL) 2QFY19 numbers were broadly in line with estimates. Net revenue at Rs 91bn (+8.6% YoY) was led by 5.5% volume growth (2.1mn units) and 3% increase in net ASP. EBITDA fell 5% YoY at Rs 13.8bn, with contraction in margin (-220bps YoY/-45 bps QoQ) at 15.2% owing to delay in price hike and unfavourable product mix.

We maintain our Buy rating on Hero MotoCorp with TP of Rs3,810 as the company reported a decent performance despite headwinds such as intense price war, increasing cost of ownership for 2Ws, expiry of Haridwar plant benefits and RM cost pressure. The management re-iterated their confidence of double digit growth in the industry considering favourable macros. To sharpen its edge over competition and plug the gaps in its product portfolio, the company has already launched its new premium segment bike Xtreme 200R and is all set to launch scooters with 125 cc. Q2FY19 performance was in-line with our estimates at operational levels, however PAT...

Q1FY19 revenue grew by 10.4%YoY backed by robust volume growth of 10.3% YoY aided by improving rural sentiments. EBITDA Margins contracted 60bpsYoY due to rise in raw material price & and expiry of Haridwar plant tax benefits. HMCL expects the EBITDA margin to be in range of 14-15% on the back of robust volume growth, price hikes. But surge in RM price will be watchful. We expect revenue CAGR of 12% over FY18-20E led by strong rural...

Hero's Xtreme 200R has been launched recently across India and the company has started dispatching the bike to dealerships in a phased manner. This bike is first among the new range of Hero's premium motorcycles and marks Hero' re-entry in the premium bike market. First launched in North Eastern states in July, recently the bike got launched across India in a phased manner at a price of Rs89,900 exshowroom. Xtreme 200R is the most affordable bike in the 200cc segment. Our channel check with the dealers/experts indicates that the bike is getting positive response and consumers are happy with the bike's performance after taking test drive. Towards the end of this month, people across India will start getting the...

HMC is making yet another attempt to improve its presence in the scooter segment by launching two products (of existing brands) in the 125cc category. Management highlighted that the 125cc scooter segment is a fast growing segment with 60% volume growth as buyers move up the value chain. HMC do not have presence in the 125cc scooter segment which accounts for 20% of the overall scooter volumes. Company has also renewed its focus back on the premium motorcycle segment. HMC will be targeting this segment with Xtreme 200R. On exports, the company highlighted that the scale-up is taking more time...

We attended Hero Moto's (HMCL) analyst meet. Key takeaways: (1) scooter buyers upwardly mobile, (2) penetration levels still low, (3) EVs still an evolving area, (4) ownership cycle reducing, (5) industry unlikely to see sustained price wars, (6) expansion in export markets underway....

We met Mr Niranjan Gupta (CFO) and Mr Sanjay Bhan (Head- Sales) of Hero MotoCorp (HMCL) to get an update on (a) competitive intensity in the Commuter segment, (b) product positioning for upcoming launches in the Scooter 125cc and Premium motorcycle segments and (c) risk to profitability from competition. While management sees a limited impact from the aggressive pricing strategy of a competitor, it is excited about the upcoming launches in the white spaces (Scooters 125cc and Premium motorcycle) of its product portfolio.

Revenue rose by 2.87% to Rs. 8809.82 Cr in Q1FY19 when compared to the previous quarter. Hero MotoCorp Ltd Q1FY19 results Comment

profit to Rs 909.7 crore for the first quarter ended June 2017 vis a vis Rs 914.04 crore in previous corresponding quarter. HMCL recorded a stand-alone total income of Rs 8,809.8 crore for the June quarter, an increase of 10% compared to Rs 7,980.5 crore (net of excise) posted in the corresponding quarter last year.The impact on the profit was on account of the tax benefits...

Maintain BUY with TP of Rs 4,403(19x FY20E EPS). Hero Motocorps (HMCL) 1QFY19 numbers were marginally below estimates. Net revenue at Rs 88.09bn (+11% YoY) was led by 13.6% volume growth (2.1mn units), but partially offset by decline in spare parts revenue. EBITDA rose 6.3% YoY at Rs 13.8bn,with margin at 15.6% (-62 bps YoY/-35 bps QoQ). APAT stood at Rs. 9.09bn (flat YoY) impacted by fall in other income (-12% YoY) and higher tax rate.