Motilal Oswal is bullish on Hero Motocorp recommended buy rating on the stock with a target price of Rs 3900 in its research report dated September 17, 2020.
Motilal Oswal 's research report on Hero Motocorp
HMCL is in a sweet spot as strong rural-led recovery plays to its strength in the Economy-Executive category in the Motorcycles segment. With an apt product portfolio for the rural market, the highest brand recall, and a strong distribution network, it is best placed to benefit from low penetration and ongoing momentum in the rural economy. HMCL's competitive positioning has improved in both the 100cc and 125cc categories post BS6. This is attributable to the narrowing of the price differential in the Economy segment (vis-à-vis BJAUTs CT100) and product upgrades in Executive 125cc. This would enable further recovery in market share in FY21 - signs of recovery are visible YTD.
We upgrade to BUY (from Neutral), with TP of INR3,900 (18x Sep'22 EPS + INR100/share for NBFCs).
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