PL Capital Keeps Accumulate on Hero MotoCorp, Revises Target to Rs 6,575
PL Capital maintains Accumulate on Hero MotoCorp post Q3 beat, revises target price downward slightly.
Shares of Hero MotoCorp were in focus on Monday after the country’s largest two-wheeler manufacturer reported its financial results for the third quarter, prompting broking PL Capital to retain its “Accumulate” rating while revising its target price on the stock.
According to PL Capital, Hero MotoCorp’s standalone operating revenue and adjusted net profit for the December quarter modestly exceeded Street expectations and were largely in line with the broking’s own estimates. The performance reflected steady demand in the domestic two-wheeler market and disciplined cost management despite a challenging operating environment.
The broking noted that volume growth remained stable during the quarter, supported by improving rural demand and continued traction in the commuter motorcycle segment. While urban demand showed mixed trends, Hero MotoCorp benefited from its strong distribution network and brand leadership in entry-level and mid-segment motorcycles.
Also Read: Nikkei 225 Jumps 5.7 Percent to Record After Sanae Takaichi Election Victory
On the margin front, PL Capital highlighted that profitability was aided by controlled raw material costs and operating efficiencies, partially offset by promotional spending and investments in new product development. The company’s focus on premiumisation and electric mobility continued, though these initiatives are expected to contribute more meaningfully to earnings over the medium term rather than immediately.
PL Capital said it has revised its target price on Hero MotoCorp to factor in the latest quarterly performance, updated earnings assumptions, and near-term demand visibility. While the broking did not signal an aggressive upside in the near term, it maintained a constructive view on the stock based on Hero’s strong balance sheet, consistent cash generation, and leadership position in the Indian two-wheeler market.
Looking ahead, the broking expects Hero MotoCorp to benefit from a gradual recovery in rural consumption, stable financing conditions, and upcoming product launches across internal combustion and electric vehicle segments. However, it cautioned that competitive intensity, pricing pressures, and execution in the EV space will remain key factors to watch. Overall, PL Capital believes the stock remains suitable for investors with a medium- to long-term investment horizon.
Also Read: Sensex, Nifty Decline After RBI Keeps Repo Rate Unchanged at 5.25%
