ICICI Direct has given Hold recommendation for Hero MotoCorp with a target price of Rs. 2925 in its research report issued on Aug 13, 2022
ICICI Direct’s research report on Hero MotoCorp
Hero MotoCorp (HMCL) is the world’s largest 2-W manufacturer by volume, with domestic market share at 34.5% as of FY22. Its suite of popular models includes Splendor, Passion, Glamour, etc. • Rural geographies form ~50% sales; 48.3% FY22 motorcycle market share • Debt-free b/s with strong return ratios; healthy >50% dividend payout ratio • On ground EV presence currently limited to ~35% stake in Ather Energy.
We maintain HOLD amid muted margin performance, mellow commitment towards EV space & await volume ramp-up during upcoming festive season. We value HMCL at revised target price of Rs 2,925 (15x P/E on FY24E EPS & 2.5x P/B to its long term strategic investments in FY24E).