Hero MotoCorp shares buck market trend as motorcycle maker woos Street with better-than-expected sales

Hero MotoCorp shares outperformed the rest of the auto pack on Thursday, a day after the auto maker reported monthly sales that exceeded analysts' estimates. The Hero MotoCorp stock rose by as much as two per cent to Rs 2,481.4 apiece on BSE.

Hero MotoCorp sold a total of 3,82,317 motorcycles and scooters in the domestic market last month, a growth of 15.3 per cent compared with the corresponding period a year ago.

Its total sales — comprising domestic sales and exports — increased 10.1 per cent on a year-on-year basis to 3,94,460 scooters and motorcycles. 

According to Zee Business research, Hero MotoCorp's total monthly sales were estimated at 3,88,000.

Hero MotoCorp’s total sales volumes grew nearly 10 per cent in motorcycles and 14.2 per cent in scooters, according to a statement.

"The volumes in the month of February indicate the continuously improving consumer sentiment and the company expects the positive trend to continue in the coming months, on the back of favourable economic indicators," Hero MotoCorp said in a statement.

Exports of two-wheeler major, however, dipped to 12,143 units in February 2023 from 26,792 units in the year-ago period.

On the electric vehicle front, the company reiterated that the infrastructure network enables VIDA scooter riders to charge the battery of the electric two-wheeler at 1.2 kilometres per minute.

Hero MotoCorp shares have grown about two per cent in value in the last one year, a period in which the Sensex rose 6.5 per cent.

According to Julius Baer Equity Research, Hero MotoCorp has created solid scale and brand equity, backed by its product offering, network, and marketing, enabling it to command customer loyalty and providing scope for increased penetration.

To fortify its position, Hero MotoCorp is increasingly focusing on premium motorcycles and scooters through enhanced product offerings, including electric vehicles (EV) while also increasing its global presence, the analysts at Julius Baer said in its report on Hero MotoCorp.

The brokerage maintains a ‘buy’ with a target of Rs 3,100 per share, implying around a 28 per cent upside in the stock.

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