Motilal Oswal's research report on Hero MotoCorp
HMCL posted a disappointing operating performance in 1QFY25 mainly due to adverse mix and impact of higher spends on EVs. Volume growth has been healthy so far in Q1 and the company is preparing itself for an anticipated strong festive season going ahead on the back of improving rural sentiment. We cut our FY25E/FY26E EPS by 9% each to factor in weak operating performance in Q1. We expect a CAGR of ~12%/15%/16.5% in revenue/EBITDA/PAT over FY24-26E. The stock currently trades at ~22x/18x FY25E/FY26E EPS. Reiterate our BUY rating on the stock with a TP of INR5,865 (19x Jun’26E EPS + INR174/INR198 for Hero FinCorp/Ather after 20% holding company discount).
Outlook
We expect a CAGR of ~12%/15%/16.5% in revenue/EBITDA/PAT over FY24-26E. The stock currently trades at ~22x/18x FY25E/FY26E EPS. Reiterate our BUY rating on the stock with a TP of INR5,865 (19x Jun’26E EPS + INR174/INR198 for Hero FinCorp/Ather after 20% holding company discount).
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