Hero MotoCorp share price fell intraday on May 10. Two-wheeler maker on May 6 reported healthy growth in March 2021 quarter earnings as standalone profit shot up 39.4 percent year-on-year (YoY) to Rs 865 crore, driven by strong revenue and operating performance.
Revenue from operations grew by 39.2 percent YoY to Rs 8,686 crore with 18.5 percent volume growth for the March 2021 quarter.
Also Read - Hero MotoCorp Q4 result beats estimates: Profit jumps 39% to Rs 865 crore on strong revenue, operating growth
Here is what brokerages have to say about the stock and company after the March earnings:
Motilal Oswal | Rating: Buy | Target: Rs 3,500
The stock currently trades at 16x/13.6x FY22E/FY23E EPS. We value HMCL at 16x Mar’23E EPS owing to volume uncertainty due to the second COVID wave and the risk of electrification.
Prabhudas Lilladher | Rating: Accumulate | Target: Rs 3,392
We believe headwinds such as weak demand sentiments and RM would get mitigated by HMCL’s increased focus on cost control (expect LEAP 2 savings of 200bp in FY21 to continue in FY22) and price hikes. We tweak FY22/23 EPS by +3%/-2% to factor in for better realizations and lower other income. However, we believe the recent correction in the stock does factor in these challenges.
ICICI Direct | Rating: Buy | Target: Rs 3,440
For HMCL we build 16.4%, 15.1% sales, PAT CAGR, respectively, in FY21-23E. With relative stability in demand and margin outlook, we believe the company offers a sizeable margin of safety at CMP (7% CFO yield, 5% FCF yield, 4% dividend yield over FY21-23E).
Dolat Capital | Rating: Accumulate | Target: Rs 3,251
We expect Q1FY22 sales to be dampened as lockdowns across India has disrupted wedding season due to the surge in COVID cases. We forecast a PAT CAGR of 17% for HMCL over FY21-23E, driven by a 13% increase in revenue.
LKP | Rating: Buy | Target: Rs 3,289
Hero posted robust set of numbers in Q4 FY21. Going forward, we expect a soft Q1, but the growth should come back in Q2 if the second wave comes under control by then.
Profitability would improve on price hikes, cost saving programs, capex reduction and operating leverage stemming from improving volumes and product mix.
Sharekhan | Rating: Buy | Target: Rs 4,030
We expect the two-wheeler industry to register a strong 12.2% y-o-y growth in FY2022E and 9.5% y-o-y growth in FY2023E. We expect Hero to be the greatest beneficiary in the sector given its leadership and largest distribution network. Also, the company’s aggressive plans in scooters, premium bikes and EV segments likely to augur well for growth in the medium term.
At 10:35 hrs Hero Motocorp was quoting at Rs 2,847.95, down Rs 8.35, or 0.29 percent.
The share touched a 52-week high of Rs 3,628.55 and a 52-week low of Rs 1,918.00 on 18 February, 2021 and 28 April, 2020, respectively.
Currently, it is trading 21.51 percent below its 52-week high and 48.49 percent above its 52-week low.Disclaimer
: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.