Buy Hero Motocorp - Q4FY13 Result Update - IIFL

- Revenues remain flattish (+1.8% yoy) despite weak volumes as realizations come in higher (+4.8% yoy)

- Margins at 13.8% were ahead of expectations and were higher on qoq basis helped by lower raw material costs. Weaker yen help cuts the raw material costs in quarter (benefit of Rs150/vehicle)

- Yen weakening also helped depreciation which includes royalty payments to Honda. Depreciation was noted lower by 6.2% qoq

- Amidst a fragile macro situation we build in moderate growth of 5% inFY14

- Upgrade to BUY on valuations with a revised 9-month price target of Rs1,837.

Source : Equity Bulls

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