The automobile industry is a global sector that involves the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the largest industries worldwide, contributing significantly to the global economy.
The shares of an Automobile company specializing in manufacturing motorcycles, scooters, and two-wheeler engines, are in focus upon trading at a discounted price.
Price action
With a market capitalization of Rs. 72,763.94 crores on Tuesday, the shares of Hero MotoCorp Limited jumped upto 0.45 percent making a High of Rs. 3655.00 per share compared to its previous closing price of Rs. 3626.35 per share. The stock is currently trading at a discount of 41.6 from an all-time high of Rs. 6,245.00.
Company Overview
Hero MotoCorp Ltd, headquartered in New Delhi, India, is the world’s largest manufacturer of two-wheelers, with a global presence spanning Asia, Africa, and Latin America, it operates in 47+ countries, known for producing a wide range of two-wheelers that cater to various segments, including commuter, sports, and electric vehicles. With a strong global presence, the company is renowned for its innovation, fuel efficiency, and durability.
Hero MotoCorp operates through an extensive network of dealerships, offering products like the Hero Splendor, Xpulse, and the VIDA electric scooters and more. The company is committed to sustainability and technological advancement, positioning itself as a leader in the evolving two-wheeler industry.
Reason or the Fall
- A decline in Market Share: Hero MotoCorp’s market share in the Indian two-wheeler industry has been declining, dropping from around 39 percent in FY2015-16 to approximately 29 percent in 2024, and further gained a bit around 29.6 percent in Q3-FY25.
- Increased Competition: Rivals like Honda Motorcycle and Scooter India have gained ground, with Honda’s sales increasing by 20 percent year-on-year, narrowing the gap with Hero MotoCorp.
- Declining Sales: Recent sales figures have been underwhelming, with a 17.5 percent year-on-year decline in total sales for December 2024, signaling weakening demand.
Market share
Hero MotoCorp holds a commanding 29.6 percent share of the Indian two-wheeler market, maintaining its leadership position, especially in domestic regions. The company’s dominance is built on a vast dealer network and a strong brand presence in the commuter segment.
Future Outlook
Hero MotoCorp has ambitious plans for the future, aiming to launch premium motorcycles and scooters, including electric models, at the Bharat Mobility 2025 event. This initiative reflects the company’s commitment to innovation and its strategic vision to meet the evolving demands of both Indian and global markets.
By focusing on premium and electric two-wheelers, Hero MotoCorp aims to tap into the growing demand for advanced, sustainable mobility solutions. The company is positioning itself to be a key player in the future of the two-wheeler market.
Electric Vehicle Initiatives
Hero MotoCorp is expanding its presence in the electric vehicle (EV) market with initiatives like VIDA powered by Hero and partnerships with Ather Energy and Zero Motorcycles.
Brokerage Target
Recently, India’s top brokerage company Axis Direct has given an ‘Buy’ target of Rs. 5,285 with an upside potential of 45.54 percent.
Financial Highlights
In Q3, Hero MotoCorp achieved a revenue of Rs. 10,566 crores, reflecting a 5.3 percent growth, marking the third consecutive quarter with revenue surpassing Rs. 10,000 crores. EBITDA rose by 8 percent to Rs. 1,476 crores, while Net Profit grew 1.2 percent to Rs.1,107.55 crores from Rs. 1,093.41 crores.
The company also reported the highest-ever quarterly revenue from parts, accessories, and merchandise, amounting to Rs. 1,555 crores, with a 9 percent year-on-year growth. Additionally, an interim dividend of Rs.100 per share was declared.
Written by Sridhar J
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