Buy Hero MotoCorp; target of Rs 3738: Arihant Capital

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

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26 Aug, 2025 12:21

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Hero MotoCorp (HMCL) declared results above estimates on all fronts in Q3FY22. Standalone revenue from operations de-grew by 6.7% QoQ/ -19.4% YoY stood at INR 78,833 Mn in Q3FY22 against our estimate of INR 77,440 Mn. EBITDA de-grew by 17%QoQ/-37%YoY to INR 9,600 Mn against our estimate of INR 8,900 Mn. EBITDA margin contracted by 44bps QoQ/ 228bps YoY to 12.2% Q3FY22 vs our estimate of 11.5%. The Company reported a net profit of INR 6,861 Mn in Q3FY22 against our estimate of INR 6,565 Mn, de-grew by 13.6% QoQ/-36.7% YoY. Basic EPS at INR 38.8 in Q3FY22 as against INR 54.3 in Q3FY21 (Q2FY22 was INR 39.8). The total volumes (Motorcycles + Scooters) de-grew by 30% YoY to 12,92,136 units. The company realizations grew 15%/4% YoY/QoQ led by improved product mix, price hikes, and higher spare parts revenue.

We value Hero MotoCorp at PE of 18x to its FY24E EPS estimate of INR 208, which yields a target price of INR 3,738. We maintain our Buy rating on the stock.

At 13:53 hrs Hero Motocorp was quoting at Rs 2,806.50, up Rs 21.20, or 0.76 percent.

It has touched an intraday high of Rs 2,871.00 and an intraday low of Rs 2,780.40.

It was trading with volumes of 34,691 shares, compared to its thirty day average of 31,422 shares, an increase of 10.40 percent.

In the previous trading session, the share closed up 0.20 percent or Rs 5.65 at Rs 2,785.30.

The share touched its 52-week high Rs 3,628.55 and 52-week low Rs 2,310.50 on 18 February, 2021 and 20 December, 2021, respectively.

Currently, it is trading 22.66 percent below its 52-week high and 21.47 percent above its 52-week low.

Market capitalisation stands at Rs 56,077.22 crore.

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