Hero MotoCorp - August 2012 Sales Update - Edelweiss

Hero MotoCorp (HMCL IN, REDUCE, TP: INR1,870)

- Total sales at 444k units (down 11.9% YoY and 8.3% MoM) were much below than our expectation of ~500k units.

- Unfavourable base i.e., festival season starts this year from September, whereas it did from August last year, accentuated the fall.

- August performance reflects the reality of poor demand for motorcycles in rural areas driven by general slowdown and weak monsoon.

- We have a 'REDUCE' recommendation on the stock with TP of INR1,870.

Source : Equity Bulls

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