ICICI Direct's research report on Hero MotoCorp
Hero MotoCorp (HMCL) reported its Q4FY17 numbers, with topline & EBITDA below our estimates but PAT above estimates. Revenues came in at Rs 6915 crore, down 7.9% YoY, up 8.7% QoQ, against our estimate of Rs 7130 crore with the miss attributable to lower than estimated realisations.
Outlook
Long term structural drivers exist in the form of the government’s focus on doubling farm income, reducing replacement cycles & low finance penetration. Hence, we change our recommendation from HOLD to BUY. We value HMCL at 17x FY19E EPS to arrive at a target price of Rs 3975.
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