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Stock To Buy: Hero Motocorp Launches e-Scooter, Stock Available At 3% Lower In Trade Today: Motilal Oswal
Top brokerage firm Motilal Oswal recommended investors to buy bluechip auto-stock Hero Motocorp. In the Indian stock markets, automobile stocks are sharply down today. The stock of Hero Motocorp is available at a 3% lower than the previous closing price in trade today. The company has also recently launched e-Scooter, which is expected to boost its growth.
Stock To Buy: Target Price
The Current Market Price (CMP) of Hero Motocorp is around Rs. 2,545.05. Motilal Oswal has estimated a Target Price for the stock at Rs. 3,100. This stock has the potential to give a 22% return, in the upcoming 1 year. It is a large-cap stock with a market capitalization of around Rs. 50,906 crore.
| Stock Outlook | |
|---|---|
| Current Market Price (CMP) | Rs. 2,545.05 |
| Target Price | Rs. 3,100 |
| Potential 1 year return | 22.00% |
| 52 week high share price | Rs. 2,950 |
| 52 week low share price | Rs. 2,146.85 |
New product launch
Hero Motocorp recently launched its much awaited e-Scooter. The company's first e-scooter under the Vida brand is positioned as an aspirational brand at the top of the pyramid. The management aims to further launch products that would cater to all segments including B2B market.
Stock Upside
"Given the management's focus on serving all e-2W segments, launching a premium product would make it easier to expand down the price curve (rather than going up, if starting at the lower end of the pyramid), though it competes directly with its investee company: HMCL seems to be creating a much wider presence across segments (including B2B), with a dedicated team and several products under development," says Motilal Oswal.
Key downside
The current valuations largely factor in all negatives: weak demand, market share loss, and low expectations from EVs. Any demand recovery (on very low base) and/or reasonable success to the EV launch can be a near-term stock price catalyst. HMCL is the brokerage firm's preferred 2W play as it offers a pure play on a demand recovery in domestic 2Ws.
Company Portfolio
The New Delhi headquartered Hero MotoCorp has been at the forefront of designing and developing technologically advanced motorcycles and scooters for customers around the world. It became the world's largest two-wheeler manufacturer in 2001, in terms of unit volume sales in a calendar year, and has maintained the coveted title for the past 20 consecutive years.
Disclaimer
The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
