The 2/3 wheeler industry in India is a significant sector, contributing approximately $10 billion to the economy. In 2022, the industry sold over 21 million units, with a projected growth rate of 8% annually. This sector plays a crucial role in providing affordable transportation and employment for millions across the country.
With a market capitalization of Rs 96,390.42 crore, the shares of Hero Motocorp Ltd were trading at Rs 4,825.65 per share, increasing around 5 percent as compared to the previous closing price of Rs 4,604.30 apiece.
Nomura, one of the well-known brokerages in India, gave a ‘Buy’ call on the auto stock with a target price of Rs 5,805 apiece, indicating a potential upside of 20 percent from Monday’s price of Rs 4,825.65 per share.
Brokerage Rational:-
As per the brokerage, Hero MotoCorp’s strong rural demand during the festive season, boosted by a healthy monsoon. The brokerage also sees growth potential from new premium bikes and EV launches, adding that Hero’s plans to expand its network and maintain a 14-16 percent margin range underline its focus on long-term growth.
Hero MotoCorp is upbeat, expecting to surpass industry growth in the next quarters thanks to new launches, growing demand, and a Christmas season boost.
Hero MotoCorp intends to debut three new bikes in the next six months—the Xpulse 210, Xtreme 250R, and Karizma XMR 250—as well as extend its premium retail network to 100+ Premia outlets by the end of FY25. By March 2025, the business plans to expand its VIDA EV selection across all price categories as well as add three ICE models to its scooter inventory.
Financial Performance:-
Recently, the company announced its financial performance in which revenue magnified by 10 percent on a year-on-year basis from Rs 9,533 crore in Q2FY24 to Rs 10,483 crore in Q2FY25. However, on a quarter-on-quarter basis, revenue increased by 3 percent from Rs 10,211 crore in Q1FY25 to Rs 10,483 crore in Q2Y25.
Moreover, net profit increased by 6 percent on a yearly basis from Rs 1,007 crore in Q2FY24 to Rs 1,066 crore in Q2FY25, meanwhile, on a quarter-on-quarter basis, net profit zoomed by 3 percent from Rs 1,032 crore in Q1FY25 to Rs 1,066 crore in Q2FY25.
Market Insights:-
Rural demand is recovering strongly, driven by favorable economic conditions and rainfall. This revival outpaces urban markets, with first-time buyers playing a significant role. Management highlights this rural surge as a key growth driver, reflecting improved purchasing power and optimism in these regions.
EV Business Developments:-
The Vida brand is scaling up with plans to expand its portfolio this fiscal year. Around 2,500 charging stations have been established in partnership with Ather, improving accessibility. Cost reduction efforts focus on technological advancements and localization to enhance profitability and competitiveness.
Management Guidance:-
Management is optimistic about two-wheeler growth, driven by rural market recovery and festive demand. Plans include regaining market share through targeted strategies and new launches. A capex of ₹1,000–₹1,200 crore is allocated for the year, emphasizing R&D investments and expansion initiatives.
Company profile:-
Hero MotoCorp Limited is engaged development, manufacturing, marketing, sale, and distribution of two-wheelers and their parts and accessories. Its product category includes motorcycles, scooters, and parts. Its motorcycle products include XTREME 200S, XTREME 160R BS6, XPULSE 200T, XPULSE 200 4V, XPULSE 200 BS6.
Written by:- Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
