Sharekhan's research repor on Hero MotoCorp
Hero Q2FY2021 results were in line with street expectations. Net sales and EBIDTA grew 24% and 17% y-o-y respectively. Hero is witnessing improvement in demand with retail sales reaching 96% of last year level in initial part of the festive season. Company expects further improvement in festives and has ramped up production. We expect strong recovery from FY22 driven by normalisation of economic activities. Operating leverage, price hikes, and cost saving under the leap programme would result in margin improvement. We expect Hero to reach its historical margin range of 15%-16%.
We raise our target price on Hero Motocorp (Hero) to Rs 3,450 as we rollover to FY23 earnings.
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