Q3FY21 Result Update - Hero MotoCorp - ICICI Direct

Hero MotoCorp (HMCL) reported a healthy Q3FY21 performance. Total 2-W sales volume was at 18.45 lakh units, up 19.7% YoY. Consequent net sales were at Rs. 9,776 crore, up 39.7% YoY amid 3% QoQ increase in ASPs to ~Rs. 53,000/unit. EBITDA margins at 14.5% were up 80 bps QoQ tracking 60 bps gross margin expansion on a QoQ basis. PAT for the quarter came in at Rs. 1084 crore, up 23.2% YoY. HMCL declared interim dividend of Rs. 70 for FY21 (includes special dividend of Rs. 5; record date - February 16, 2021).

Valuation & Outlook

For HMCL, we build 17% sales, 20% PAT CAGR in FY21E-23E. We upgrade HMCL from HOLD to BUY, valuing it at Rs. 4,000 (20x P/E on FY23E EPS; previous target price Rs. 3,480) on healthy demand outlook and unchanged long term comfort drivers i.e. capital efficiency, high dividend payouts, debt free b/s along with consistent cash generation.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HeroMotoCorp_Q3FY21.pdf

Shares of HERO MOTOCORP LTD. was last trading in BSE at Rs.3490.65 as compared to the previous close of Rs. 3428.3. The total number of shares traded during the day was 28366 in over 3146 trades.

The stock hit an intraday high of Rs. 3517 and intraday low of 3421.05. The net turnover during the day was Rs. 98552407.

Source : Equity Bulls

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