ICICI Direct has given Hold recommendation for Hero MotoCorp with a target price of Rs. 2495 in its research report issued on May 05, 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.

Outlook

We retain HOLD amid faster than anticipated EV transition domestically and await firmer EV commitment by HMCL. We value HMCL at revised target price of Rs 2,495 (12x P/E on FY24E EPS & 2x P/B to its long term strategic investments in FY24).

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