Sharekhan has given Buy recommendation for Hero MotoCorp with a target price of Rs. 4030 in its research report issued on May 07, 2021
Sharekhan’s research report on Hero MotoCorp
Q4FY21 results were broadly in line with expectations, with operational performance slightly ahead of expectations. Standalone PAT rose by 39.4% y-o-y in Q4FY21, driven by a 39.2% growth in revenues and a 330 bps rise in EBITDA margin. We believe structural growth in the two-wheeler industry remains intact and Hero continues to benefit from premiumisation of its products, stronghold in the economy & executive motorcycle segments and aggressive product offerings in the premium bike and scooters segments. Stock is attractively valued at P/E multiple of 13.5x, EV/EBITDA multiple of 7.6x its FY2023E estimates, with attractive dividend yield of 3.6%.
We reiterate a Buy rating on Hero MotoCorp Limited (Hero) with an unchanged PT of Rs. 4,030, factoring in strong business outlook and attractive valuations.