Hero MotoCorp Ltd. share price target

Hero Motocorps (HMCL) Q3 EBITDA was in line with estimate. ASP's grew 3% QoQ (2% better than estimated, driven by uptick in spares) which offset a slight miss in EBITDA margin (at 15.9% vs. est of 16.3%) owing to seasonally higher marketing.

Hero Motocorp reported 4% increase in net profit to Rs 805.43 crore for third quarter ended December 2017 against Rs 772.05 crore posted during the same period last year. The company's revenues grew around 15% at Rs 7,305.49 crore against Rs 6,364.6 crore last year due to higher sales volume growth. Margins continued to take a bit hit even during this quarter....

Maintain BUY on HMCL with target price of Rs 4,360. Hero Motocorps (HMCL) 3QFY18 numbers were broadly in line estimates. Net revenue stood at Rs 73bn (+15% YoY), on the back of 16% YoY rise in volumes (1.7mn units), offset by 1% fall in net ASP. EBITDA stood at Rs 11.6bn (+7.2% YoY, with 15.9% margin).Margin contracted 110bps YoY led by fall in ASP, lower tax incentives for Haridwar plant and higher marketing spends. APAT at Rs. 8bn (4.3% YoY, in line estimates) impacted by lower other income (-16% QoQ).

During Q3FY19, Hero MotoCorp Ltd (HMCL) sales grew by 14.8% YoY to Rs73.1bn, driven by 16% volume growth and a 1% decline in average realizations. EBITDA margins during the quarter declined by 111bps yoy to 15.9% mainly on account of gross margin decline of 252bps.

Industry: Auto and Auto Components | Industry View: Positive Volumes to remain buoyant on new launches In line quarter, margins disappoint a bit Total net revenues in the quarter went up by 17% yoy while dipping by 12.6% qoq as volumes...

Hero Motocorp Ltd (HMCL) reported Q2FY18 numbers, above our estimates on the operational front. Revenues came at | 8362 crore, up 7.3% YoY/up 4.9% QoQ, lower than our estimates of | 8820 crore. The topline is lower on account of GST related accounting changes for company's Haridwar plant & fall in net ASPs. Net blended ASPs stood at | 41339 vs our estimate of | 43604. Total volumes for the quarter stood at 2022805 units (highest ever quarterly sales), up 10.9% YoY/9.1% QoQ. The motorcycle volumes...

Hero Motocorps (HMCL) Q2 sales growth at 7% YoY was impacted by GST accounting treatment (adjusted growth at 11%). Consequently, EBITDA margin at 17.4% was 120 bps ahead of estimate. Management indicated festive sales saw robust double digit growth and remain positive for H2FY18.

Hero Motocorp reported 1% increase in net profit to Rs 1010.49 crore for second quarter ended September 2017 against Rs 1004.22 crore posted during the same period last year. The company's revenues grew around 7% at Rs 8,362 crore against Rs 7,796 crore last year. Margins continued to take a bit hit even during this quarter....

We value HMCL at Rs 4,360 (20x) vs Rs 4,250 earlier. Maintain BUY Hero Motocorps (HMCL) 2QFY18 EBITDA at Rs 14.55bn (+6.3% YoY, with 17.6% margin) was slightly above estimates, led by the benefit of operating leverage and lower other expenses. Net revenue stood at Rs 83.6bn (+7% YoY, +5% QoQ), on the back of 11% YoY rise in volumes. This was offset by lower accounting of GST incentives against excise benefits (Rs. 500mn) for the Hardwar plant, and a fall in net ASP. PAT at Rs 10.1bn (+1% YoY, +11% QoQ) was in-line with estimates.

markets has already started as per the management. Also the Halol plant which started from March will take up the total capacity to 8.9 mn per year which would enable the company to cater to the demand which is expected to move up from FY 18. Another upcoming plant at AP is supposed to take up this capacity to 10 mn in a couple of years. We therefore believe that the company is poised for a healthy volume growth in the ensuing years, sorting out capacity issues if any. Furthermore, H2 will witness a bump up in sales growth based on lower base of last year's H2 when demonetization was implemented. Hence, expect Hero's volumes to grow at a higher pace of 9.1%/10.4% for FY18E/19E respectively....