Sharekhan's research report on Hero MotoCorp
Q4FY21 results were broadly in line with expectations, with operational performance slightly ahead of expectations. Standalone PAT rose by 39.4% y-o-y in Q4FY21, driven by a 39.2% growth in revenues and a 330 bps rise in EBITDA margin. We believe structural growth in the two-wheeler industry remains intact and Hero continues to benefit from premiumisation of its products, stronghold in the economy & executive motorcycle segments and aggressive product offerings in the premium bike and scooters segments. Stock is attractively valued at P/E multiple of 13.5x, EV/EBITDA multiple of 7.6x its FY2023E estimates, with attractive dividend yield of 3.6%.
Outlook
We reiterate a Buy rating on Hero MotoCorp Limited (Hero) with an unchanged PT of Rs. 4,030, factoring in strong business outlook and attractive valuations.
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