Hero MotoCorp: A fundamentally strong business available at reasonable valuation
The second half of 2021-22 is expected to see a demand recovery for Hero MotoCorp on the back of customer preference towards personal mobility, positive rural sentiment and new products, especially in the premium segment
May 10, 2021 / 10:06 AM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
Hero MotoCorp (CMP: Rs 2,855; Mcap: Rs 57,070 crore) has posted a decent set of numbers for the final quarter of FY21 albeit on a low base of last year. Sequentially, the numbers indicate a slowdown in demand momentum and the rising pressure of commodity-linked raw material prices. However, Hero MotoCorp’s (HMCL) cost reduction efforts have been able to arrest the fall in operating margin.
Though the demand for the company’s products is expected to be muted in the first...