Hero MotoCorp on Friday reported a 51% year-on-year (YoY) growth in net profit for the quarter ended December to Rs 1,073.40 crore, which was largely on expected lines. Revenue from operations grew 21% YoY in the quarter to Rs 9,724 crore and was higher than an ETnow poll of Rs 9,690 crore.
Read more: Hero MotoCorp Q3 Results: Profit surges 51% YoY to Rs 1,073 crore; co to pay Rs 100/share dividend
Here’s what brokerages recommended:
Nuvama: Buy | Target: Rs 5,600
The company reported a strong Q3, enhancing its premiuma and EV focus in the said quarter, Nuvama said adding that the EBITDA and PAT were in line with its estimates. Factoring in better volume and margin assumptions, it has increased FY24E/25E EPS by 12%/14%. “HMCL is geared up to benefit from the 2W industry upcycle and new products including Harley X440, Karizma 210, Xtreme 125, Xoom 125/160 and EVs that can potentially add sales of 30,000–40,000 units/month,” Nuvama added.Nuvama has maintained a ‘Buy’ view on Hero with a target price of Rs 5,600 which is up from Rs 5,000 earlier. The new target is based on 21x P/E and the value of investments/cash at Rs 608/share.
Kotak Equities: Sell | Target: Rs 3,675
Hero MotoCorp reported an in-line quarter with a better-than-expected gross margin print. Though it was off-set by higher marketing spending toward the EV and premium motorcycle segments during the quarter, Kotak said.Notwithstanding the launch of multiple products, Nuvama believes that it will be challenging for the two-wheeler maker to make significant inroads in the premium motorcycle and scooter segments, given weak brand positioning and strong inclination toward established brands.
The brokerage retained a ‘Sell’ for a target price of Rs 3,675.
Motilal Oswal: Buy | Target: Rs 5,560
Motilal Oswal has reiterated a buy on the stock for a target price of Rs 5,560 which is a 13% upside. The company’s operating performance was in line with Motilal’s estimates.
While the industry is expected to see double-digit revenue growth in FY25, HMCL aims to outperform the industry with new launches.
“We maintain our FY24E EPS but increase our FY25E EPS by 10% to factor in better product mix and volume recovery,” Motilal said in its post-earnings stock review note.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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