BNP Paribas upgrades Hero Honda to buy

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BNP Paribas upgrades Hero Honda to buy
An announcement has been made by BNP Paribas regarding an up-gradation that it has brought in the status of Hero Honda Ltd., from 'hold" to 'buy". Apart from this the price target of the company also went through a marginal increase from Rs. 1,630 to Rs. 1,800.

BNP Paribas said that it believes Hero Honda will at least maintain, if not improve, margins at the Q4 FY11 level, helped by better pricing discipline and operating leverage. As in accordance to the French Bank, the shares of the company had not been performing well till the quarter ended on December 2010. However, the latest trend witnessed by the shares of the company show a drastic improvement.

"We believe Hero Honda will at least maintain, if not improve, margins at the 4QFY11 level, helped by better pricing discipline and operating leverage on high volume growth despite an increase in input costs and export-development expenses," BNP Paribas said in a note. The estimates of earnings per share of Hero Honda has also been hiked by the bank which now stands at Rs. 120 (2012 fiscal year) and Rs. 140 (2013 fiscal year), that is a rise by 3% and 7%, respectively.

BNP Paribas is the largest global banking group in the world, headquartered in Paris with its second global headquarters in London. It has one of the highest credit ratings in its peer group with the long term debt of the group. It is a universal bank split into three strategic business units- "retail banking", "corporate & investment banking", and "investment solutions" (which includes asset management, custodial banking, and real estate services.)

Read more about: hero honda, results, auto
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