Hero MotoCorp hikes prices for motorcycles, scooters; stock rallies 2%

Shares of Hero MotoCorp rallied 2 per cent on Tuesday, in their biggest intraday percentage gain since June 12 after automaker said its total sales in June rose 13 per cent to 704,562 vehicles. The auto major also said it made an upward revision in prices of motorcycles and scooters, to partially offset rising input costs and currency depreciation.

Reacting to its auto sales figures, the stock gained as much as 2 per cent to Rs 3483.80 on the BSE. The stock settled at Rs 3450.10, up 1 per cent.

The largest two-wheeler maker Hero MotoCorp on Monday reported a 13 per cent growth in June sale at 7,04,562 units over the same month last year, while its first quarter sales crossed 2.1 million units.

In the year-ago month, the Delhi-based company had clocked a turnover of 6,24,185 units, it said in a statement.

The company has also has announced an upward revision of prices for its motorcycles and scooters, with immediate effect, to partly offset the consistently rising input costs, including the prices of commodities, and currency depreciation. Prices will increase by up to Rs 500.

Global brokerage Nomura believes the company raising prices by up to Rs 500 at ex-showroom level should support margins. The brokerage maintained 'buy' rating on Hero MotoCorp stock with a price target at Rs 4,483.

"Riding on robust sales of two-wheelers, we have created another global benchmark, clocking over 2.1 million unit sales in the June quarter of the current fiscal year," Hero said in the statement.

Hero sold 2,104,949 units in the first quarter, bettering its own previous record in the September quarter of FY18, when it had 2,022,805 units.

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The company said it had crossed the 7-lakh unit monthly sales thrice in the past, in April 2018 selling 7,06,365 units, March 2018 selling 7,30,473 units and in September 2017 when it had sold 7,20,739 units.

The company expects better sales going forward with the monsoon already hitting many parts of the country ahead of time, which will lead to a positive consumption pattern.

"Hero is geared-up with an array of products, including its premium motorcycles and the new scooter range to add to the positive sentiment and further delight the customers," the company said.