Investors are increasingly looking to equities like Hero MotoCorp for possible gains as India’s auto industry expands at a rapid rate. Hero MotoCorp also released their Q2 FY2024 earnings on November 1, 2023.
In this article, we’ll look at Hero MotoCorp’s performance in-depth, assess its growth prospects, and decide whether it’s a good stock to hold for the future.
Hero MotoCorp Q2 FY2024 Results
Hero MotoCorp reported a significant 47% year-on-year increase in net profit to Rs 1,054 crore in Q2 FY24, driven by higher prices and easing commodity costs. The company saw a 4% increase in revenue to Rs 9445.42 crore and sold 1.42 million units during the quarter.
Key achievements included the launch of the Harley-Davidson X440 and the new Karizma XMR, enhancing its premium portfolio, and a strong 26.5% increase in total sales in October 2023. The period also witnessed a surge in EBITDA by 28% and strong festive demand signaling returning consumer confidence and market robustness.
Hero MotoCorp Q1 FY2024 Results
- Hero MotoCorp Q1 FY2024 PAT up 32% to Rs 825 crore.
- Revenue rises by 4.5% to Rs 8,767 crore.
- Lower commodity costs, price hikes, and product mix contribute to profit growth.
- Total sales dipped by 3%, with domestic sales down 0.8% and exports slumping 43%.
- The company is optimistic about future growth, focusing on the premium segment and EV expansion.
Latest news about Hero MotoCorp
- Hero MotoCorp’s share price climbs above ₹4,000, marking the first time in six years.
- Record-breaking festive sales for Hero MotoCorp, surpassing 1.4 million units.
- Hero MotoCorp’s Q2 financials reveal a 47% year-over-year increase in profit after tax to Rs 1,054 crore, surpassing expectations.
You can buy Hero MotoCorp shares from the following trading platforms:
➤ Zerodha
➤ Upstox
➤ Groww
➤ AngelOne
➤ ICICIDirect
| When | Maximum Price | Minimum Price |
| January 2024 | ₹4,26.71 | ₹3,171.05 |
| February 2024 | ₹4,201.13 | ₹3,235.77 |
| March 2024 | ₹4,097.07 | ₹3,301.80 |
| April 2024 | ₹3,986.48 | ₹3,205.63 |
| May 2024 | ₹3,632.00 | ₹3,158.26 |
| June 2024 | ₹3,762.75 | ₹3,271.96 |
| July 2024 | ₹3,725.12 | ₹3,239.24 |
| August 2024 | ₹3,874.13 | ₹3,368.81 |
| September 2024 | ₹4,029.09 | ₹3,503.56 |
| October 2024 | ₹3,950.09 | ₹3,434.86 |
| November 2024 | ₹4,068.59 | ₹3,537.91 |
| December 2024 | ₹4,470.31 | ₹3,626.36 |
The projected share price targets for Hero MotoCorp in 2024 present an optimistic outlook for investors.
In January, the share price is expected to range between ₹3,646.71 and ₹3,171.05, showing potential growth. This positive trend continues into the following months, with February, March, and April featuring maximum prices of ₹3,721.13, ₹3,797.07, and ₹3,686.48, respectively.
May and June maintain a strong outlook, with the share price varying between ₹3,632.00 and ₹3,762.75. July through December 2024 exhibit further gains, culminating in a maximum target price of ₹4,470.31 and a minimum of ₹3,626.36 by year-end, indicating a promising trajectory for Hero MotoCorp’s shares throughout the year.
| When | Maximum Price | Minimum Price |
| January 2025 | ₹4,253.72 | ₹3,272.09 |
| February 2025 | ₹4,362.78 | ₹3,355.99 |
| March 2025 | ₹4,532.93 | ₹3,486.87 |
| April 2025 | ₹4,444.05 | ₹3,418.50 |
| May 2025 | ₹4,314.61 | ₹3,318.93 |
| June 2025 | ₹4,508.77 | ₹3,468.29 |
| July 2025 | ₹4,420.36 | ₹3,400.28 |
| August 2025 | ₹4,557.08 | ₹3,505.44 |
| September 2025 | ₹4,716.57 | ₹3,628.13 |
| October 2025 | ₹4,839.21 | ₹3,722.47 |
| November 2025 | ₹4,960.19 | ₹3,815.53 |
| December 2025 | ₹5,084.19 | ₹3,910.92 |
The projected share price targets for Hero MotoCorp in 2025 depict a highly favorable outlook for investors. In January, the share price is anticipated to range between ₹4,253.72 and ₹3,272.09, setting a robust start to the year. February and March continue this upward trend, with maximum prices of ₹4,362.78 and ₹4,532.93, respectively, reflecting steady growth.
Throughout April to June, Hero MotoCorp’s shares maintain their strength, fluctuating between ₹4,314.61 and ₹4,508.77. As the year progresses, the share price is expected to see remarkable growth, with the maximum target price reaching ₹5,084.19 and a minimum of ₹3,910.92 by December 2025, indicating a highly optimistic trajectory for the company’s shares over the year.
| Year | Maximum Price | Minimum Price |
| 2026 | ₹5,338.40 | ₹3,736.88 |
| 2027 | ₹5,872.24 | ₹4,110.57 |
| 2028 | ₹8,221.14 | ₹4,110.57 |
| 2029 | ₹7,117.87 | ₹3,558.93 |
| 2030 | ₹9,253.23 | ₹6,477.26 |
The long-term share price targets for Hero MotoCorp spanning from 2026 to 2030 paint a highly encouraging picture for investors.’
In 2026, the company’s shares are predicted to range between ₹5,338.40 and ₹3,736.88, indicating substantial growth potential. The optimism continues into 2027, where share prices are expected to vary from ₹5,872.24 to ₹4,110.57, signifying a sustained upward trend. 2028 presents a remarkable forecast, with a maximum price target of ₹8,221.14 and a minimum of ₹4,110.57, showcasing strong performance.
The positive trajectory extends into 2029, as share prices are projected to fluctuate between ₹7,117.87 and ₹3,558.93. Finally, in 2030, Hero MotoCorp’s shares are anticipated to reach new heights, with a maximum target price of ₹9,253.23 and a minimum of ₹6,477.26, highlighting the company’s promising outlook over the coming years.
Financial Condition of Hero Motocorp: Last 5 years
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Sales (in Rs. Crores) | 33,971 | 29,254 | 30,959 | 29,551 | 34,158 |
| Expenses (in Rs. Crores) | 28,946 | 25,184 | 26,902 | 26,295 | 30,060 |
| Operating Profit (in Rs. Crores) | 5,025 | 4,070 | 4,058 | 3,256 | 4,099 |
| OPM (%) | 15% | 14% | 13% | 11% | 12% |
| Other Income (in Rs. Crores) | 741 | 1,434 | 553 | 545 | 567 |
| Interest (in Rs. Crores) | 37 | 47 | 46 | 53 | 105 |
| Depreciation (in Rs. Crores) | 624 | 846 | 715 | 690 | 697 |
| Profit Before Tax (in Rs. Crores) | 5,104 | 4,611 | 3,849 | 3,058 | 3,864 |
| Tax (%) | 32% | 21% | 24% | 24% | 28% |
| Net Profit (in Rs. Crores) | 3,466 | 3,659 | 2,936 | 2,329 | 2,800 |
| EPS (in Rs) | 172.44 | 182.14 | 146.05 | 115.95 | 140.61 |
| Dividend Payout (%) | 50% | 49% | 72% | 82% | 71% |
Over the last five years, Hero MotoCorp’s financial condition has witnessed a mix of trends. Sales figures demonstrated a mild fluctuation, with 2019 recording the highest at Rs. 33,971 crores, followed by a dip in 2020, and then a gradual recovery to reach Rs. 34,158 crores in 2023. However, expenses increased consistently from 2019 to 2023, reflecting the challenges of cost management. Operating profit, on the other hand, displayed some volatility but generally followed a downward trajectory from 2019 to 2023. The operating profit margin (OPM) fluctuated within this period. Despite fluctuations, the company has maintained a double-digit OPM.
Other income saw variations but overall remained stable. Interest expenses increased, reflecting potential borrowing or debt obligations. Depreciation costs remained relatively steady. Profit before tax showed a declining trend, with 2023 seeing a modest recovery. Tax percentages increased over the years, possibly impacting the net profit, which decreased consistently from 2019 to 2023. Earnings per share (EPS) followed a similar trend, reflecting the impact on shareholders.
One notable aspect is the dividend payout percentage, which surged in 2022, indicating a commitment to rewarding shareholders despite profitability challenges. However, it decreased in 2023, likely as a measure to preserve capital. Overall, Hero MotoCorp’s financial performance reflects the dynamics of the automotive industry and the company’s strategies to navigate changing market conditions.
JM Financial recommends purchasing Hero MotoCorp with a target price of Rs 4,579 (December 14, 2023).
FAQS
It is anticipated that Hero Motocorp’s share price will increase to ₹4,470.31 by the end of 2024.
How has Hero’s dividend payout ratio been over the last five years?
Hero’s dividend payout ratio has been increasing over the last five years, with a maximum of 71% in FY23 and a minimum of 49.41% in FY20.
The share price target of Hero Motocorp for 2025 might be around ₹5,084.19.
The per-share price of Hero Motocorp might reach around ₹9,253.23 by the end of 2030.
Should you invest in Hero Motorcorp?
The current state of HERO MOTOCORP’s fundamentals appears strong as of March 2023, making it a potentially promising option for long-term investment.
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Conclusion
Nevertheless, Hero’s financial performance over the previous five years has been outstanding, with both sales and profit consistently increasing. While the company’s PAT expanded at a CAGR of 4.47%, its sales increased at a rate of about 3.75% CAGR. Hero has kept up its earnings growth at a CAGR of 4.08% despite the difficult economic climate.
The projected prices for 2026 and 2030 are 5,252.67 and 18,384.35 respectively, making the prospective returns on investment seem alluring. Additionally, Hero’s stock appears to be cheap based on its current P/E ratio of 19.32. Investors aiming for long-term gains may find Hero shares to be a suitable investment given the company’s stable financial performance and development possibilities.
What did we learn?
