Hero MotoCorp - March 2013 Results Preview - Motilal Oswal

- Expect volumes to rise 1% YoY (1% QoQ) to 1.58m. Product mix is expected to remain stable sequentially.

- Adjusted margins is likely to improve 70bp QoQ to 9.4% (-140bp YoY) on favorable JPY/USD movement.

- Demand environment for two-wheelers has deteriorated over the last few months. The company has guided for mid-single digit industry growth for FY14.

- We cut FY14/FY15 EPS by 10%/9.4% as we lower our FY14 growth assumptions on slower economic recovery, partly offset by margin improvement on favorable forex movement.

- We have cut our FY14E/FY15E EPS by 10%/9.4% respectively.

- The stock trades at 15.1x/10.9x FY14E/FY15E EPS respectively. Maintain Buy.

Source : Equity Bulls

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