Hero MotoCorp Share Price Gains As Q2 Net Profit Beats Estimates

Hero MotoCorp Ltd.'s share price was up 5% on Monday after the company clocked a net profit of Rs 1,204 crore, against a Bloomberg estimates of Rs 1,152 crore.

Brokerages were positive, as Citi Research shared a note with a 'buy' rating on the stock, though reduced the target price to Rs 6,300 from Rs 6,600 apiece earlier, implying a potential upside of 36.5%. Nuvama Institutional Equities also has a 'buy' rating on the stock, with a target price of Rs 6,200 per share.

Both brokerages noted strong rural demand and an encouraging festive season as key growth drivers. The company also has a strong pipeline, including new premium motorcycle launches and affordable EVs.

• Revenue up 10.8% at Rs 10,463 crore (Estimate: Rs 10,213 crore).

• Ebitda up 14.1% at Rs 1,516 crore (Estimate: Rs 1,482 crore).

• Margin up 40 basis points at 14.5% (Estimate: 14.5%).

• Net profit up 14.2% at Rs 1,204 crore (Estimate: 1,152 crore).

Hero MotoCorp's stock rose as much as 5.02% during the day before paring gains to trade 4.53% higher at Rs 4,815.55 apiece, compared to a 0.74% decline in the benchmark Nifty 50 as of 10:48 a.m. 

The stock has risen 43.94% in the last 12 months and 16.96% on a year-to-date basis. The relative strength index was at 42.

Of the 42 analysts tracking Hero MotoCorp, 28 have a 'buy' rating on the stock, seven recommend a 'hold' and seven suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price target implies a potential upside of 9.5%.