East India Securitie's report on Hero MotoCorp
Hero’s better than estimated operational performance gives us confidence on its ability to perform better in the uncertain times as well. The company gained market share in recent times due to its undisputed leadership in lower segment motorcycles and unmatched rural reach. The momentum is expected to continue. Green shoots are clearly visible with sustainability of return of demand. Hero’s focus on fast filling white spaces (Premium + Scooters + Exports), along with rural uplift would result in outperformance as compared to the industry in the coming years. LEAP-II program and Project mileage efforts would yield in better margins during recovery period as compared to earlier years. It has showcased its strength of rapidly getting its supply chain back to near normal. We believe Hero MotoCorp is very well positioned for a sustained long-term growth.
We maintain our ‘Accumulate’ rating for a target price of Rs 3,070.
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