Accumulate Hero MotoCorp; target of Rs 2784: Prabhudas Lilladher

Prabhudas Lilladher's research report on Hero Motocorp

Hero MotoCorp Analyst Meet shared medium to long-term vision for the Indian 2W market and HMCL's strategy. The management remains optimistic about long term 2W demand scenario and expects HMCL to be the key beneficiary of the same. The management has a 6 focus areas for HMCL to accelerate growth - 1) continuously growing in Entry/Deluxe segments 2) building on premium motorcycle portfolio 3) Increasing its scooter market share 4) scaling up international business 5) nurturing emerging segments like EVs and 6) leading sustainably. We expect near term growth challenges, however normal monsoons and pre buying ahead of BS VI is expected to boost demand from festival season.

Outlook

We maintain 'Accumulate' with a price target of Rs2,784 based on 16x Mar'21 EPS. Deterioration in demand post BS VI pre buying is a key risk to our call.

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