Hero MotoCorp shares gain 3% on Q1 earnings: Buy, sell or hold?

Shares of Hero MotoCorp rose over 3 percent today after the two-wheeler company reported more than doubling of consolidated profit after tax for the quarter ending June 2022. Profit for Q1 stood at Rs 585.58 crore on higher sales of Rs 256.46 crore. In the corresponding period of the previous fiscal year. Shares of Hero MotoCorp gained 3.02 percent to Rs 2844.8 on the day against the previous close of Rs 2,760. 90 on BSE.

Shares of Hero MotoCorp are up 3 percent year-to-date and could rise 15 percent by 2022.

A total of 0.19 lakh shares changed hands resulting in a sale of 5.38 crore on BSE. The stock touched a 52-week high of Rs 2,952.60 on September 17, 2021 and a 52-week low of Rs 2,148 on March 8, 2022.

Income from operations in Q1 stood at Rs 8,447.54 crore compared to Rs 5,502.80 crore in the corresponding period a year ago.

Also read: Hero MotoCorp’s consolidated profit after tax rose more than 2 times.

The company sold 13.90 lakh motorcycles and scooters in the first quarter of the fiscal year.

A combination of cost-saving measures, fair price increases and model alignment prepayments have helped the company maintain margins in the face of production winds and supply chain disruptions due to geo-political issues, it said.

Total expenditure rose to Rs 7,692.93 crore as compared to Rs 5,169.4 crore in the corresponding period of the previous financial year. The cost of consumables has increased by Rs 6,095.68, from Rs 4,174.94 in the previous fiscal year.

Also read: Hero MotoCorp has launched a new Splendor trim priced at Rs 77,430.

HDFC Securities Institutional Research Desk He raised the target price for the insurer.

“In the premium segment, Hero MotoCorp is targeting to increase its market share to 10 per cent in the coming years with at least one launch in the coming years (Hero MotoCorp’s share has reached 10 per cent in the major cities of Bangalore, Coimbatore, Cochin, Allahabad, Azamgarh and Bareilly). In motorcycles, especially rural Sustained demand recovery in areas could be a key supportive trigger for the stock. At 12.4x FY24 PER, valuation is attractive. We maintain BUY at revised estimate of Rs 3,347 (from Rs 3,268) till Jun-24.

Also read: Hero MotoCorp teases all new black Super Glory 125; It will start soon

JM Financial He has assigned a buy call to the two-wheeler stock.” The company has a multi-pronged approach to EVs by investing in Pea, partnering with Gogoro and in-house product development (first product expected in the upcoming festive season). a) Exports, b) MC premiumisation and c) ) Scooterization: We expect Hero MotoCorp to be supported by improving consumer spending to 14 percent CAGR (over FY22-24E). We estimate standalone EPS to post c. 32 percent CAGR FY22-24E. Buy us in March 2023 with a target of 3,200 Expect value (15x forward earnings). After the upcoming holidays, supply demand will be a key follow-up,” said the broker.

Prabhudas Lilader He made a buy call of Rs 3,130 against a strike price of Rs 2,762.

“Hero expects BUY as we believe (1) rural recovery and holiday season demand (2) exports and prepayments (3) additional savings from the Leap Savings program to margin expansion and (4) success in EVs. By investing in Pea, domestic Mass Production (Vida) and JV with Gogoro. Our estimates are largely unchanged. Hold ‘Buy’ with a target price of Rs 3,130 (FY24E standalone EPS at 15x, Rs 143 for Fincorp and Rs 63 for Peas),” the broker said.

Shares in live markets: Sensex up 300 pts, Nifty above 17,750; M&M, Asian Paints top winners

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