Hero MotoCorp Q2 Results Review: Brokerages Bullish As Festive Demand, Rural Sales Drive Revenue
Hero MotoCorp’s demand outlook remains robust, with rural participation in festive season sales slightly outpacing urban areas, Citi noted.
Brokerages remain optimistic about Hero MotoCorp Ltd.’s growth trajectory, citing strong rural demand and an encouraging festive season as key drivers. Both Citi Research and Nuvama Institutional Equities have reiterated their positive outlook on the stock, noting the company’s ability to leverage its extensive rural network and product strategy to sustain growth.
Hero MotoCorp's net profit rose 14.2% year-on-year to Rs 1,204 crore in the second quarter of fiscal 2025, while its revenue was also up 10.8% at Rs 10,463 crore—its highest ever.
Hero MotoCorp Q2 FY25 Result Highlights (Standalone, YoY)
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).
Citi has a 'buy' rating on the stock with a reduced target price of Rs 6,300 from Rs 6,600 earlier, implying a potential upside of 36.5%. The brokerage noted that Hero MotoCorp’s demand outlook remains robust, with rural participation in festive season sales slightly outpacing urban areas.
Rural sales accounted for 53.7% of total sales during the second quarter, up from 52% a year ago, Citi noted. It sees further growth potential as monsoon effects fully materialise. Festive season demand grew 13% with the company selling 1.6 million units in 32 days.
Nuvama has a 'buy' rating on the stock with a target price of Rs 6,200 per share. The note pointed to Hero MotoCorp’s dominance in rural-focused states and its strong presence in the 100–125cc categories. It attributed the company’s performance to improved terms of trade for farmers, supportive government policies, and a rising rural upcycle.
Both brokerages also underscored Hero MotoCorp’s focus on premium motorcycles and electric vehicles as a growth strategy. The company plans to launch an affordable EV product by the end of 2024. Citi noted the strong product pipeline, including new premium motorcycle launches and affordable EVs, while Nuvama highlighted the company’s positioning to benefit from increasing demand in these segments.
Despite the optimism, Citi flagged concerns over high expenditures in the EV business, which it said could impact blended margins, and trimmed its target price to Rs 6,300 per share. Nuvama maintained its target price at Rs 6,200, citing strong fundamentals and projected revenue growth over the next three years.
