Hero MotoCorp’s share topped the chart on August 07, surging 4.3%. It was the top gainer in the Nifty 50. Nuvama Institutional Equities sees an upside of 16% in the stock as it believes that it is well placed to capture the rural demand. However, Jefferies sees it as unlikely and expects that the stock might fall 27% in the next 12 months.
Nuvama on Hero MotoCorp: Well placed to benefit from rural demand
Nuvama Institutional Equities forecasted a revenue and core earnings CAGR of 5% each over FY25-28 with a healthy free cash flow (FCF) of Rs 4,510 crore per year and dividend yield of 4%. The brokerage has maintained its ‘Buy’ rating on the automobile giant. Nuvama has slightly raised the target price on Hero MotoCorp to Rs 5,200 from Rs 5,100, implying an upside of 16%. The brokerage firm values investments/cash at Rs 974/share.
Hero MotoCorp’s revenue declined by 6% YoY to Rs 9,580 crore in Q1 FY26, which was in line with the estimates of Nuvama.
“Hero MotoCorp is well-placed to benefit from rural demand owing to a wide network and a strong presence in the 100– 125cc categories. Recent launches are aimed at bolstering its position in the premium and scooter segments—Xpulse 210, Xtreme 250R, Xoom 125/160, Destini 125 and VX2. Upcoming launches include a new deluxe 125cc model and a refreshed 125cc variant,” said Nuvama.
Jefferies on Hero MotoCorp: Sees downside upto 27%
Jefferies stands with a different approach, as it has an ‘Underperform’ call on Hero MotoCorp. The brokerage has a target price of Rs 3,330 on the stock, implying a downside of 27% from the current market price.
Hero MotoCorp’s Q1 volumes fell 11% YoY, while EBITDA fell 5% YoY. EBITDA margin was flat YoY at 14.4% and up 20 basis points QoQ.
Jeffereis further said that Hero MotoCorp is seeing good traction in its electric mobility business as well as global operations, and the company has a strong pipeline of new product launches.
Hero MotoCorp stock performance
The share price of Hero MotoCorp has risen 9% in the last five trading sessions. Hero MotoCorp’s stock price has given a return of 8% in the past one month and a bit over 9% in the last six months. However, the stock of the automobile giant has erased more than 10% of investors’ wealth in the last one year.