Accumulate Hero MotoCorp; target of Rs 3473: Kotak Securities

Kotak Securities' research report onHero MotoCorp

We attended the analyst meet of Hero MotoCorp. Management discussed their upcoming new products and touched upon broader aspects of the two wheeler industry.HMC is making yet another attempt to improve its presence in the scooter segment by launching two products (of existing brands) in the 125cc category. Management highlighted that the 125cc scooter segment is a fast growing segment with 60% volume growth as buyers move up the value chain.

Outlook

We expect the margins to improve over the medium term. We retain ACCUMULATE rating on the stock with unchanged price target of Rs3,473. We have valued the stock at a PE of 17x on FY20E earnings.

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