Q4FY21 Result Update - Hero MotoCorp - ICICI Direct

Hero MotoCorp (HMCL) reported a robust Q4FY21 performance. Total 2-W sales volume was at 15.68 lakh units, up 18% YoY, down 15% QoQ. Consequent net sales in Q4FY21 came in at Rs. 8,686 crore, up 39.2% YoY but down 11.1% QoQ with blended ASPs at ~Rs. 55,395/unit (up 4.6% QoQ). EBITDA margins were down 50 bps QoQ at 13.9%, with gross margins expanding 10 bps QoQ despite a spike in input costs over the past few months. PAT came in at Rs. 865 crore, up 39.3% YoY. HMCL declared a final dividend of Rs. 25/share for FY21 along with a special dividend of Rs. 10/share. Hence, total dividend was at Rs. 105/share for FY21.

Valuation & Outlook

For HMCL we build 16.4%, 15.1% sales, PAT CAGR, respectively, in FY21-23E. With relative stability in demand and margin outlook, we believe the company offers a sizeable margin of safety at CMP (~7% CFO yield, ~5% FCF yield, ~4% dividend yield over FY21-23E). We maintain BUY, valuing it at Rs. 3,440 i.e. 17.5x P/E on FY23E EPS (earlier target price Rs. 4,000).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HeroMotoCorp_Q4FY21.pdf

Shares of HERO MOTOCORP LTD. was last trading in BSE at Rs.2856.3 as compared to the previous close of Rs. 2913. The total number of shares traded during the day was 86035 in over 7829 trades.

The stock hit an intraday high of Rs. 2992.2 and intraday low of 2820.5. The net turnover during the day was Rs. 247118738.

Source : Equity Bulls

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