Hero MotoCorp Ltd. share price target

Resurfaced chip availability concerns amid geopolitical issues Russia is the largest producer (~40% share in global production) of rare earth metal palladium, which is used in manufacturing of semiconductor. Further Ukraine is the largest producer of neon gas, which is another important component for semiconductor (chip) manufacturing. Therefore, any supply chain disruption of these critical raw materials in this space would impact the availability of chips, resulting in an adverse impact on OEM volumes and associated productivity. Rise in Brent crude to impact margins as well as demand...

Hero MotoCorp is India's leading two-wheeler manufacturer in terms of unit volume sales in a calendar year. It holds nearly 50% of the market share in the Indian motorcycle market. The company has 7 manufacturing facilities,...

We value the stock at 15x FY24E EPS, implying a 16% upside from the CMP.

Hero's 3QFY22 EBITDA margin at 12.2% surprised positively and came ahead of our estimates (of 11.8%). This was led by premiumization, multiple price hikes over the year, focus on cost savings program and higher spares revenue (15% of sales vs 10% YoY). Management expects 2W industry to rebound in FY23 as colleges and other industries open-up, fear of COVID resides and expectation of good Rabi crop & commodity cost eases out. For EV business, the company will leverage its existing strengths (logistics, manufacturing etc.) and e-scooter will be launched in Mar-22....

Operating profit margin has declined from 14.73% to 12.27%, leading to 32.09% decline in operating profit to Rs 983.10 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 70.50% to 70.11%. Employee cost increased from 5.34% to 6.71%. Other expenses rose from 9.62% to 10.58%. Other income fell 41.52% to Rs 120.22...

What should investors do? HMCL's share price has lagged the Nifty Auto Index in the past five years, de-growing at 5.6% CAGR from ~| 3,266 levels in February 2017. We retain HOLD rating amid slower than anticipated volume recovery and...

Hero MotoCorp is India's leading two-wheeler manufacturer in terms of unit volume sales in a calendar year. It holds nearly 50% of the market share in the Indian motorcycle market. The company has 7 manufacturing facilities,...