Hold Hero MotoCorp in your portfolio, says Bhat

Dilip Bhat, Joint MD, Prabhudas Lilladher advice traders to hold Hero MotoCorp in their portfolio.

Bhat told CNBC-TV18, “Auto, volume has not given any respite so far. There doesn’t seem to be great optimism also on that front that there is going to be any great volume growth also even in the second half. So, by and large I think the competition has been doing pretty well especially the Japanese Honda Motors, probably they are doing pretty good volumes at the moment.”
He further added, “Hero MotoCorp, what the market really likes about is that, inspite of this kind of de-growth they stil have an RoE which is close to around 47-48%. The company is still generating good amount of free cash. So, in my opinion I would look at when to buy this particular company in this particular correction because the longer term perspective still remains pretty good even if there is going to be a very low volume growth, I think the overall parameters in terms of the RoEs, the free cash and the kind of dividend that the company gives, all that makes one feel that one should definitely hold it on to the portfolio, the question is whether now or after some more correction.”