February 16, 2017 / 16:37 IST
Hero MotoCorp (HMCL) reported its Q3FY17 numbers with topline in line with our estimates but margins & PAT above estimates. Revenues came in at Rs 6365 crore, down 11.9% YoY, 18.4% QoQ, vs. our estimate of Rs 6385 crore with the marginal miss attributable to lower than estimated realisations.
Outlook
Although long term structural drivers exist in the form of governments focus on doubling farm income, reducing replacement cycles & low finance penetration, in the near term, growth will be a challenge in the 2- W space. Therefore, we change our rating to HOLD. We value HMCL at 16x FY19E EPS to arrive at a target price of Rs 3330. We have a HOLD recommendation on the stock.
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