Edelweiss's research report on Hero MotoCorpHero MotoCorp’s (HMCL) Q4FY16 revenues (INR75bn) and EBITDA (INR11.8bn) were in line with our estimates. Key highlights: (1) industry growth to remain subdued in FY17 with low single-digit growth in H1 and likely pickup in H2 assuming normal monsoons; (2) scooter capacity ramped up to 125K units/month (from 100K units); (3) adverse impact of higher commodity prices is likely to reflect from Q2; (4) reiterated long term sustainable margin target of 14-15%. Maintain ‘HOLD’ with a revised target price of INR2,904 (INR2,810 earlier) We revise upwards our FY17/18E EPS by 2/3% to factor in higher volumes due to expectation of normal monsoons. At CMP, the stock trades at FY18E PER of 15x. We maintain ‘HOLD/SU’ with target price of INR2,904(15x FY18E core EPS plus INR344 cash per share). For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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