HDFC Securities has given Buy recommendation for Hero Motocorp with a target price of Rs. 3890 in its research report issued on Feb 06, 2021
HDFC Securities’ research report on Hero Motocorp
Hero’s 3Q PAT (+23% YoY) surprised as profits exceeded the Rs 10bn level after several (13) quarters. The narrative at Hero is gradually changing with a focus on premium products as (1) Hero is steadily ramping up its product portfolio in the 150cc+ range; (2) the collaboration with Harley will provide the OEM an entry in the ‘heritage’ segment.
We maintain BUY and raise our FY22/23 estimates by ~6% over FY21-23 to factor in the improved operational performance. We set a target price of Rs 3,890 at 19x FY23E EPS (at a 15% premium to its long-term average trading multiple).