Brokerages remain mixed on Hero MotoCorp post Q2 results; see up to 18% upside

Global brokerage firms remained mixed on Hero MotoCorp post Q2 results after India's leading two-wheeler company reported a 16.7 per cent year-on-year (YoY) decline in the standalone profit at Rs 794 crore.

The most aggressive target price of Rs 3,170 was put out by JPMorgan translating into an upside of 18 per cent from Rs 2,683 recorded on 12 November.

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The two-wheeler maker reported a profit of Rs 953 crore posted in a year-ago quarter. Its revenue from operations fell 9.8 per cent to Rs 8,453 crore from Rs 9,367 crore posted last year.

EBITDA stood at Rs 1,066 crore, down 17.1 per cent, from Rs 1,286 crore posted last year. Margin contracted to 12.6 per cent in Q2FY22 from 13.7 per cent posted in Q2FY21.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

JP Morgan: Neutral| Target raised to Rs 3170 from Rs 3110

JPMorgan maintained its neutral rating on Hero MotoCorp post Q2 results but raised the target price to Rs 3,170 from Rs 3,110 earlier.

Jefferies: Hold| Target cut to Rs 3, 000 from Rs 3,130 earlier

Jefferies maintained its hold rating on Hero MotoCorp post September quarter results but slashed its target price to Rs 3,000 from Rs 3,130 earlier.

The 2Q EBITDA/PAT declined 17 per cent YoY on lower volumes but were 24-26% above estimates.

The company reported near-all-time-high gross profit & EBITDA on a per vehicle basis as price hikes, and internal cost controls help offset input cost pressures.

Nomura: Neutral| Target Rs 2981

Nomura maintained its neutral rating on Hero MotoCorp post Q2 results with a target price of Rs 2,981.

The risk of mass segment slowdown execution on EVs is a key monitorable for any re-rating.

Given rising prices and high fuel costs, we think that demand for mass segments like 2Ws can face pressure, said the note.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)