Hold Hero MotoCorp; target of Rs 2910: ICICI Direct

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26 Aug, 2025 12:21

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Hero MotoCorp (HMCL) is the world’s largest 2-W manufacturer by volume, with domestic market share at 34.5% as of FY22. Its suite of popular models includes Splendor, Passion, Glamour, etc. Rural geographies form ~50% sales; 48.3% FY22 motorcycle market share • Debt-free b/s with strong return ratios; healthy >50% dividend payout ratio • Recently launched its captive EV offerings i.e. Vida V1 Pro & Vida V1 Plus at Rs 1.45-1.59 lakh/unit. HMCL is also approaching electrification through collaborative investments in Ather Energy, Gogoro & Zero Motorcycles.

We maintain HOLD amid slow pace of volume recovery in the 2-W space, premium offerings by HMCL in EV space amid more lucrative offerings by its peers (both existing as well as new age) limiting the volume ramp up. We value HMCL at revised target price of Rs 2,910 (14x P/E on FY24E EPS & 2x P/B to its long term strategic investments in FY24E).

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