Hero MotoCorp - Better Growth Visibility Driven By Recovery In Two-Wheeler Demand: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.We expect Hero MotoCorp Ltd. to deliver a 7% volume compound annual growth rate over FY23-25, driven by its:increased competitiveness in the economy and the executive segments after the recent launches,growth in the Premium segment, faster growth in Scooters, and ramp-up in exports. The company will benefit from a rural recovery, thanks to its strong brand equity in the economy and executive segments, which contribute over 90% of its overall volumes..Multiple growth drivers at play: Hero MotoCorp’s newest co-developed product with HD, X440, has received a strong response with over 25,000 bookings. We are observing increased interest in the core Executive segment (Splendor and Passion) due to a reduced percentage-wise price differential between the Entry and Executive models. Any improvement in its competitive positioning within the scooters, premium motorcycles, or EV segments will serve as catalysts for re-rating of the stock..We now value Hero MotoCorp at 18 times December-25E earnings per share (versus 16 times Sep-25E EPS earlier). Hero MotoCorp is currently trading at a one-year forward valuation of 18 times, which is in line with its 10-year long period average. In comparison, its peers Bajaj Auto Ltd. and TVS Motor Company Ltd. are trading at a premium of ~17% and 26% to their respective historical valuations. We expect a revenue/Ebitda/profit after tax compound annual growth rate of ~10%/20%/21% over FY23-25. We reiterate Hero MotoCorp as our top pick in original equipment manufacturers (along with Tata Motors Ltd.) and maintain our 'Buy' rating with a revised target price of Rs 4,480 (premised on 18 times Dec-25E EPS plus Rs 231/Rs 74 for Hero FinCorp/Ather after applying a 20% holding company discount)..Click on the attachment to read the full report:.Large Caps To Take Spotlight In 2024, Says ICICI Prudential's S Naren.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Hero MotoCorp - Better Growth Visibility Driven By Recovery In Two-Wheeler Demand: Motilal Oswal

Growth strategies in place for expansion in premium and EV segments

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Hero MotoCorp - Better Growth Visibility Driven By Recovery In Two-Wheeler Demand: Motilal Oswal

Growth strategies in place for expansion in premium and EV segments

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