Accumulate Hero Motocorp; target of Rs 3084: Dolat Capital

Dolat Capital`s research report on Hero Motocorp“Hero Motocorp Ltd. reported numbers inline with our expectations on revenues as well as operational levels, however completion of amortization of Royalty to Honda from this quarter led to lower depreciation expenses, this coupled with higher other income led to higher profits. Revenues were flat sequentially & up by 21% on yearly basis.” “We expect Hero’s volumes to improve further in the current quarter with the ongoing festive season. We believe, Hero with a slew of new launches & higher focus on Exports, coupled with cost control measures, would improve its profitability in the coming few quarters. We expect margins to improve by 180-200 bps in the next 2-2.5 years backed by higher exports coupled with the cost control initiatives of the company. The company has already added Rs 90 crs in the first half of the current year to the EBIDTA due to its cost saving measures.

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