Stock To Buy: Autombile Stock Showing Upside Potential, Target Price Rs 3202: Nirmal Bang

Leading brokerage firm Nirmal Bang has recommended Hero MotoCorp Ltd for investment with a target price of Rs 3202 apiece. The current market price of the stock is Rs 2841 apiece. The analyst expects 13% return if you buy Hero MotoCorp Ltd at the current market price. The company saw strong demand uptick during the festive season with retails growing at 20% YoY against expectation of double-digit growth. The overall demand sentiments continued to remain upbeat in Nov'22 as well. Check key takeaways below:

1. Hero MotoCorp Stock Performance

The current market price of the stock is Rs 2841 apiece with an intraday gain of 0.38%. The stock's 52-week high is Rs 2939 apiece and 52-week low is Rs 2148 apiece, respectively. The large cap company has a market capitalisation of Rs 56,810 crore.

2. Hero MotoCorp Return

The stock has declined 21% in last 5-years, gained 17% in last 3-years, and 16% in last 1-year. It has jumped 7% in 1-month and 6% in 1-week.

3. Premiumisation

The company is working towards gaining market share in the premium motorcycle segment going ahead. It is planning a series of new product launches in the 250-750cc category over the next few years with 1-2 model planned every year. Along with model launches, it is also planning to premiumise its distribution channel. The company is also co-developing a mid-weight product along with Harley Davidson to penetrate into the higher category segment. It is looking at premiumisation across segments, not only in the >150cc segment. It has introduced X-Tec model across segments and is seeing good penetration (approx. 25-40% of product family), according to the Nirmal Bang report. 

4. Hero MotoCorp Valuation

According to Nirmal Bang, "We believe that HMCL has an edge in the EV space compared to new-age companies because of the large scale at which it operates, its well-established supply chain network and its ability to launch more models to address a larger market. We expect HMCL to become one of the dominant players in the EV space once the market matures. We maintain BUY on HMCL with a FY24E target price (TP) of Rs3,202 (unchanged), valuing it at 14x Sept'24E EPS and add Rs99/share for Hero Fincorp and the value of its Ather stake at transaction value.

 

5. About Hero MotoCorp

Hero MotoCorp has eight globally benchmarked manufacturing facilities, including six in India and one each in Colombia and Bangladesh. It became the only Indian two-wheeler company to set up a manufacturing base in Latin America when it started operations at its manufacturing facility at Colombia in 2016. Hero MotoCorp currently has an annual combined production capacity of around 9 million units of two-wheelers, according to its official website.

Disclaimer

The stock has been picked from the brokerage report of Nirmal Bang. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.