The brokerage firm cited Hero MotoCorp’s strong fundamentals, including its leading market share in the domestic two-wheeler industry and its focus on product development. Emkay Global believes that the company’s recently launched Xtreme 125R motorcycle has been well-received by consumers, leading to a reversal in market share and contributing to the company’s overall growth.
The brokerage also highlighted the positive trends in the domestic two-wheeler market, with retail volumes growing by approximately 26% year-over-year in April 2024. Hero MotoCorp’s April volumes were up by around 23%, indicating a further deepening of the recovery.
Emkay Global’s optimistic outlook on the two-wheeler industry is supported by factors such as the replacement-led upturn in demand, with industry volumes still below pre-pandemic levels. Additionally, favorable weather forecasts for the monsoon season could further drive rural demand for motorcycles.
As a result of these positive developments, Emkay Global projects 9%, 11%, and 12% volume, revenue, and earnings per share (EPS) compound annual growth rates (CAGRs) for Hero MotoCorp over the next three fiscal years. At the time of writing, Hero MotoCorp shares were trading 1.19% higher at 4,448.55 apiece on the BSE.
