Arihant Capital recommended hold rating on Hero MotoCorp with a target price of Rs 3081 in its research report dated August 17, 2020.
Arihant Capital 's research report on Hero MotoCorp
HeroMoto Corp reported weak set of numbers with sharp de-growth in revenue at 63% YoY, impacted due to Covid related disruption amid auto slowdown. EBITDA stood at Rs 1,081 Mn ( -90.7%YoY/-83.6% QoQ with margin of 3.6% (-1078bps YoY/-694 QoQ).Profit for the quarter de-grew by 92% YoY to Rs 613 Mn during Q1FY21. The total volumes (Motorcycles + Scooters) declined by 69.3% YoY to 5,65,000 units led by subdued demand.
Outlook
We value Hero MotoCorp at PE of 19x to FY22 EPS estimate of Rs 162, which yields a target price of Rs 3,081. We maintain our Hold rating on the stock.
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