The share price of motorcycle and scooter manufacturing company Hero MotoCorp fell 6 percent intraday on March 30 after the company decided to halt operations till March 31, 2020, at all its manufacturing plants globally to maintain the health and well‐being of employees, due to escalating COVID‐19 situation.
Amid the coronavirus lockdown, Hero MotoCorp has suspended full payments to suppliers since sales have paused and there is “no visibility of receivables,” according to a report by The Economic Times.
Moneycontrol could not independently verify the story.
The two-wheeler manufacturer's dealerships will be closed till April 14 due to a 21-day nationwide lockdown to contain the spread of COVID-19. Hero MotoCorp told suppliers that several BS-IV AND BS-VI vehicles were unsold at the dealerships, the report said.
Hero MotoCorp has the highest share of the total 700,000 unsold BS-IV scooters and motorcycles in India, the report said.
“Despite the challenging circumstances... we are prioritizing payments process to make full and on-time payments to a large number of MSMEs and small vendors,” the company said in an email to The Economic Times.
In a report on March 16, Kota Institutional Equities upgraded Hero MotoCorp to “add” from a “sell”. The brokerage firm has fixed the fair value of the stock at Rs 2,150, a 20 percent upside from the current market price.
"We upgrade the stock to 'add' from 'sell' on attractive valuations (11 times FY22E core EPS). While the catalysts for near- term growth are absent due to impact on consumption because of Covid-19 and shift to BS-VI norms from April 2020, we believe growth will resume for the company from the second half of FY21 led by a revival in rural demand," Kotak said.
The share price shed over 43 percent in the last 6 months and was quoting at Rs 1,550.00, down Rs 110.15, or 6.63 percent. It has touched an intraday high of Rs 1,655.00 and an intraday low of Rs 1,550.
It was trading with volumes of 31,277 shares, compared to its five day average of 41,402 shares, a decrease of -24.45 percent.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.