Hero MotoCorp Ltd. share price target

Hero Motocorps (HMCL) 4QFY17 EBITDA at Rs 9.57bn (-19.5% YoY) came in below estimates, led by a poor model mix, higher RM cost and discounts offered to clear the BS3 inventory. PAT at Rs 7.2bn (-14% YoY) was affected by a lower operating margin (13.8%, -200bps YoY). The drop in the 4Q margin is a one-time impact, owing to the ban on BS3 vehicles.

We are witnessing a pick up in the domestic two wheeler business off late post the slump witnessed in Q3 due to DeMon. On the back of two back to back drought years followed by a strong monsoon in FY17, we believe that 2W segment will recover fast shrugging off the weakness of last quarter. Expected good monsoon and higher infrastructure spending from GOI are expected to be the macro drivers, while the new model launch (6 models) would be the micro drivers for Hero. Pent up demand of FY17 will be catered to in FY18E and on low base of FY17 and lower 2W penetration levels (35%) we can see a strong growth in FY18E. Hero with ~50% volumes coming from the rural markets will see demand coming from there in...

Hero Motocorp Ltd. revenue declined by 6.4% to Rs 6,915 cr from Rs 7,385Cr in the corresponding quarter of previous year. During quarter, company has sold 16.21 lakh units, declined by 5.8% on YoY basis and inclined by 10.1% on Q-o-Q basis. Hero Motocorp's strong point is the executive segment in the motorcycle market, but this is also the category that is increasingly being cannibalized by scooters, owing to similar price points. Company has continued to maintain leadership in Motorcycles segment. Due to lower operating leverage, Operating EBITDA margins decreased by 185...

Demonetization impact and volume outlook:Volumes have recovered gradually post demonetization on the back of the company taking steps to facilitate cashless transaction, etc.

Hero Motocorp's (HMCL) Q3 operating performance was 11% ahead of estimate, as EBITDA margin at 17.0% (up 130 bps YoY) beat est of 15.4%. Management expects single digit growth in FY18 post ~9% decline in Nov/ Dec. Given the low base of H2FY17, we believe there is upside potential to this...

ICICI Securities Ltd | Retail Equity Research Hero MotoCorp (HMCL) reported its Q3FY17 numbers with topline in line with our estimates but margins & PAT above estimates. Revenues came in at | 6365 crore, down 11.9% YoY, 18.4% QoQ, vs. our estimate of | 6385 crore with the marginal miss attributable to...

The demonetisation has impacted HMCL's volumes sharply with decline in all parameters. Company expects the volumes growth to remain challenging in 4QFY17E and expects high single digit volume growth in FY18E. As automobile industry recovers, HMCL looks to be better positioned due to its higher market share in the motorcycle segment. The c..

Revenue fell by 18.56% to Rs. 6245.9 Cr in Q3FY17 when compared to the previous quarter. Also, it fell by 12.05% when compared with Q3FY16.

Revenues fell 12% YoY to Rs63.6bn (est Rs62.3bn), with realizations beating expectations and rising 1% YoY. Once again, margins defied expectations of rising RM costs by expanding 131bps YoY to 17% (est.15.4%), with gross margins expanding 274bps (RM purchase lag). PAT fell 3% YoY to Rs7.7 bn. HMCL's strong balance sheet, attractive RoEs (~35%) and dominant distribution network remain as positives, and rural spending is likely to rebound by Q1/Q2FY18. However, long term, we remain skeptical of Hero's prospects given; 1) A maturing motorcycle segment; 2) Industry price hikes due to BSIV impacting demand; 3) Margins tapering due to excise benefit expiry in FY19; 4) Weak presence in more premium segments and 5) Higher R&D; spending....