Hero MotoCorp Q2 Results Review - Inline Operating Performance: Motilal Oswal

Motilal Oswal Report

Hero MotoCorp Ltd. posted an inline operating performance in Q2 FY25. ICE margin stood at 16.5% (+160 basis points YoY) while the ramp-up of Vida led to 200 bp margin contraction in Q2. Hero MotoCorp has seen 13% volume growth in this festive period and expects this momentum to sustain on the back of the ongoing marriage season in November and improved rural sentiment.

We cut our FY25 earnings per share estimates by 1% but a much higher 11% for FY26 as we lower our volume growth expectation and also moderate our other income estimates. Post the recent correction, stock is attractively valued at ~20 times/18.5 times FY25E/FY26E EPS.

We reiterate our Buy rating on the stock with a target price of Rs 5,420 (19x Sep’26E EPS plus Rs 143/Rs 264 for Hero FinCorp/Ather after 20% holding company discount).

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