Hero MotoCorp Ltd. share price target

Hero MotoCorp (HMCL) Q1FY19 PAT was below our and consensus estimates mainly on account of higher tax outgo led by expiry of Haridwar tax benefit. EBITDA margin stood at 15.6% below our and consensus estimates of 16.0% and 15.9% due to higher RM cost. Earnings below estimates: Revenue grew 10.4% YoY to Rs88bn, after adjusting accrued Haridwar GST accounting the underlying revenue growth of 14.9%. Other operating income declined 35% QoQ to Rs1.79bn. Revenue performance were majorly driven by volume performance as volumes grew +14% YoY/+5% QoQ to 2.1mn units. Net realizations were down -2.8%YoY due to GST factor and -2.2%QoQ due to lower other...

ICICI Securities Ltd | Retail Equity Research Hero MotoCorp (HMCL) reported Q1FY19 results, which were below our estimates. Revenues came in at | 8810 crore, up 10.5% YoY, 2.9% QoQ, below our estimate of | 9141 crore with the miss attributable to lower than estimated realisation. Net blended ASPs were at | 41,853/vehicle vs. our estimate of | 43,428/vehicle. However, as per management, if we exclude spare revenues & other operating income, 2-W realisations have increased ~| 400 QoQ...

We are positive on domestic 2W industry over FY19-FY20 and HMCL being key rural player would benefit from the likely uptrend. Looking ahead, we expect HMCL's volume to clock ~10% CAGR over FY18-FY20E aided by new products and strong rural demand. However, reducing our realisation, margin and earnings estimates to factor in higher competitive intensity and aggressive pricing, we reduce our EPS estimate by 7%/6% for FY19E/FY20E. Considering lower earnings growth and likely pricing war in the industry, we lower our P/E valuation multiple from 18x to 16x 1-Year forward. Post sharp price correction and valuation comfort, we maintain...

With HMCL leadership in the entry level segment, any efforts from the other players to gain market share cannot be ignored by HMCL. We believe that there can be pricing cut by other players to gain some market share in this price sensitive segment. Though HMCL is the strongest brand, we believe that HMCL will have to play as per the market dynamics. We don't expect HMCL to resort to aggressive price cuts, but ability to increase / pass on increase in input prices get limited. We will monitor this closely in the coming months to ascertain future margin profile....

costs to sales came in at 70% as against 67.7% yoy and 67.6% qoq as the impact of rising RM prices was felt in the quarter. Margins came in at 15.6% which were a tad below expectations on RM price hike despite other expenses (9.7% of sales v/s 11.4% yoy)...

Hero Moto (HMCL) has guided for healthy double-digit volume growth in FY19 driven by demand from rural areas and its strategy of refraining from competitive pricing. Management is also confident of countering raw material cost pressures via timely price hikes. The company sold over 21mn vehicles in Q1FY19, leading to 11% YoY revenue growth at Rs 88bn. We remain positive on the stock but cut FY19/FY20 EPS by 7%/5%. Our Mar'19 TP thus reduces...

same period last year. The company's revenues grew around 24% at Rs 8564 crore against Rs 6,922.8 crore last year due to higher sales volume growth. Margins registered significant jump during this quarter. Bottomline growth was restricted partly due to huge rise in tax provision. Sales volumes of the company jumped to just over 2 million units in the quarter ended March 2018, nearly 24% higher than Q4FY17, as demand from rural markets picked up. Domestic...

HMCL is increasing its capacity with the Andhra Pradesh greenfield plant which is expected to be ready by in 2HFY20. The capacity and the production is also expected to increase with the phase wise expansion of the Halol plant. The management expects to double the production at Halol plant from 300,000 units in FY18. With the additional capacity, the total manufacturing capacity of HMCL will reach at ~11mn units per annum by...

Revenue increased by 17.09% to Rs. 8564.04 Cr in Q4FY18 when compared to the previous quarter. Hero MotoCorp Ltd Q4FY18 results Comment

Hero MotoCorp (HMCL) reported 4QFY17 results, were above our and in line with consensus estimates. Result was better than our estimates on account of lower RM cost and better realization. Revenue grew +24% YoY to Rs85.6 bn which were above our and in-line with consensus estimates. Revenue growth after adjusting accrued incentives pertaining to CGST were 26% YoY to Rs87.4 bn. Spare part revenue for the quarter grew +10% YoY/ +7% QoQ to Rs7.7bn. RM cost for the year gone up which was off-set by the operating leverage and other cost initiatives taken by the company. Leap benefits for the FY18 was ~50-60 bps. EBITDA for the quarter...