ICICI Direct has given Hold recommendation for Hero MotoCorp with a target price of Rs. 2870 in its research report issued on Oct 10, 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 • Apart from its own product offering under Vida brand, HMCL is approaching electrification through collaborative investments in Ather Energy, Gogoro (swappable battery sol) & Zero Motorcycles (premium electric motorcycles).
We maintain HOLD rating on HMCL amid muted volume recovery prospects in 2-W segment, HMCL’s focus to target the premium segment in EV space through its offering under brand Vida with premium pricing despite being a mass market mother-brand & slower than anticipated rollout pan India. We value HMCL at a revised target price of Rs 2,870 (14x P/E on FY24E EPS & 2.5x P/B to its long term strategic investments in FY24E).
At 12:16 hrs Hero Motocorp was quoting at Rs 2,559.55, down Rs 14.15, or 0.55 percent.
It has touched an intraday high of Rs 2,576.65 and an intraday low of Rs 2,546.20.
It was trading with volumes of 154,725 shares, compared to its thirty day average of 22,284 shares, an increase of 594.32 percent.
In the previous trading session, the share closed down 1.91 percent or Rs 50.05 at Rs 2,573.70.
The share touched its 52-week high Rs 2,950.00 and 52-week low Rs 2,148.00 on 18 October, 2021 and 08 March, 2022, respectively.
Currently, it is trading 13.24 percent below its 52-week high and 19.16 percent above its 52-week low.
Market capitalisation stands at Rs 51,145.50 crore.