Hero MotoCorp Shares Surge After Q4 As Brokerage Remain Upbeat On The Stock

Hero MotoCorp‘s share price was upbeat on Thursday as the company’s March quarter results impressed several analysts.

What Happened: In the March quarter, the company’s revenue from operations reached ₹9,519 crore, marking a 15% increase from the previous year’s ₹8,307 crore. The auto major’s net profit for the quarter surged by 18% to ₹1,016 crore, compared to ₹859 crore reported in the preceding year. The company declared a final dividend of ₹40 per share. Impressively, they sold 13.92 lakh units of motorcycles and scooters during the March quarter, indicating strong performance in their sales figures.

Analyst Reactions: BofA Securities maintained its “buy” rating for the stock with a price target of ₹5,400. The brokerage firm said that the company’s March quarter results were in line with its estimates. The analysts added that the year ending March 2025 can be a big year for the company with recovery in the rural market and new launches.

Emkay Global also maintained its “buy” rating for the stock raising the price target to ₹6,000 from ₹5,100. The target indicates an around 30% upside from the stock’s last closing price. The brokerage also said that the company’s performance during the January-March quarter was mostly in line with estimates. The analysts also said that the two-wheeler major is their top pick in the auto segment.

Jefferies also maintained its “buy” rating for the stock with a price target of ₹5,650. The research firm said that the company posted another good quarter. The brokerage said that the company’s EBITDA was higher than its estimates and EBITDA/vehicle also hit a new high.

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CLSA also maintained its outperform rating for the stock with a price target of ₹5,250. The global brokerage firm said that the company’s March quarter results were above its estimates. The analysts also highlighted that the company has guided for double-digit revenue growth.

HDFC Securities, on the other hand, maintained its “reduce” rating for the stock but raised the price target to ₹3,876 from ₹3,535. The brokerage said that the auto giant’s Q4 margin at 14.3% was ahead of its estimate of 13%. The brokerage said that the margin improvement was driven by product mix, lower commodity costs and price hikes taken. However, the brokerage said that they remain cautious about the stock “given its patchy track record of new launches”.

Kotak Securities also maintained its “sell” rating for the stock but raised the target price to ₹3,950 from ₹3,675. The analysts said that the company’s Q4 results missed its estimates on almost all fronts. Hero MotoCorp posted a 2% quarter-on-quarter decline in revenues, slightly weaker than the brokerage’s estimates. The EBITDA margin stood at 14.3%, which was 30 basis points below their estimates. The net profit at ₹1,016 crore was 8% lower than anticipated.

Price Action: Hero MotoCorp’s share price was up 0.74% to trade at ₹4,647.90 as the markets opened on Thursday.

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