Jefferies and Motilal Oswal maintained a buy view on the counter while others including Morgan Stanley and Macquarie took underweight and neutral positions.
Hero MotoCorp on Wednesday reported strong earnings for the quarter ended September 2023, with the net profit surging over 47% year-on-year (YoY) to Rs 1,054 crore. The bottomline was higher than the ETNow poll of Rs 983 crore. Revenue from operations increased by 4% on year to Rs Rs 9445.42 crore and was also above the estimated Rs 9,209 crore. The country’s largest two-wheeler maker sold 1.42 million units in the September quarter, compared to 1.35 million units a quarter ago.
Here is what top brokerages recommended:
Morgan Stanley: Underweight | Target: Rs 2,521
Morgan Stanley has maintained an underweight stance on the counter with a target price of Rs 2,521. The Q2 gross margin beat Morgan’s estimates with EBITDA in-line with its estimates. Higher other operating expenses were on account of model launch expenses and festive promotional spending, the brokerage noted.
Jefferies: Buy | Target: 3,500
Jefferies has a buy rating on the two-wheeler stock for a target price of Rs 3,500. The Q2 EBITDA growth was strong in Jefferies’ view as the EBITDA/vehicle rose 5% QoQ to a new all-time high.
Macquarie: Neutral: | Target: Rs 3,180
Macquarie maintains a neutral stance on Hero Moto shares for a target price of Rs 3,180. The Q2 gross margin-led modest EBITDA beat, it said in a post-earnings stock review, adding that EBITDA per unit stood at a new high. In its view, the market-share loss in entry and the executive segment and slower progress versus peers on E2Ws pose growth challenges.
Motilal Oswal: Buy
Motilal has a buy view on the counter. It said that higher other expenses offset the raw material cost savings. The Q2 EBITDA margin at 14.1% was higher than its estimates of 13.7%.
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