Jefferies has downgraded Hero MotoCorp’s rating to ‘Underperform’ from ‘Hold’ and revised the target price to Rs 4,950 from Rs 5,550. The new price target implies a downside of nearly 15% from the current market price. The downgrade came as the brokerage warned that the GST cut-driven demand boost had faded in November-December.
The downgrade impacted the share price of Hero MotoCorp in Thursday’s session, falling as much as 5.2% to an intra-day low of Rs 5,513 on the National Stock Exchange.
Hero MotoCorp: Market share drop in December
The market share of Hero MotoCorp has dropped again in December, after a seasonal improvement in the festive months. The stock price has moved up 40% from year to date, mainly led by valuation expansion. However, at 20x FY27 PE, Jefferies finds it ‘expensive’ and prefers Mahindra & Mahindra, TVS, and Eicher Motors over Hero MotoCorp in the automotive space.
Jefferies on Hero MotoCorp: Market share concerns emerging again
Hero MotoCorp’s domestic two-wheeler wholesale market share has fallen to just 28% in 8 months of FY26 April-November 2025 from 36-37% seen between FY17-FY21, a 25-year low. Although the company remains dominant in entry-level motorcycles. It has gained some share in EV scooters in FY26. However, adverse demand profile shift away from entry-level motorcycles and market share losses in 110-125cc motorcycles, as well as ICE scooters in recent years, have been hurting Hero MotoCorp.
Even in registrations, the company’s market share improved from 27% in April-September to 33% in October-November, which was broadly in line with historical seasonality. However, its market share has dipped sharply to just 21% in December month-to-date.
This led the brokerage to cut FY26-28 EPS estimates for Hero MotoCorp by 2-7% mainly factoring in lower volumes.
Nonetheless, Jefferies remained constructive on two-wheeler demand in the coming years as the industry is still recovering from its worst downturn of decades, and FY25 wholesales were still 6% below FY19.
Hero MotoCorp stock performance
The stock price of Hero MotoCorp has fallen almost 5% in the last five trading sessions. The stock has declined 1.8% in the past one month. However, the stock delivered over 31% return over the past six months and over 29% in the last one year.