Expensive valuation, grim market share outlook: How Morgan Stanley sees Hero MotoCorp in FY25

Global brokerage Morgan Stanley maintains that weak sales in FY25 is likely to impact the company's earnings by 12 per cent. The brokerage is cautious on the company as it sees a nearly 70-80 per cent probability of market share de-growth.

As per FADA or Federation of Auto Dealers Association, the retail market share of the auto company plunged to 28.1 per cent in January. Also, so far in February sales at the Delhi-based auto company declined 11 per cent on year on an average daily.

Moreover, the brokerage pin-pointed that the company is trading at a premium valuation with FY25 price to earnings (P/E) trading at 21 times as against 10 years median P/E of 16 times.

Hero MotoCorp has outperformed the benchmark Nifty index by nearly 11 per cent on a year-to-date basis.

Last at around 13:37 pm, shares of the auto major traded with a cut of 3.44 per cent to Rs 4686.5, while at day's low it slumped nearly 4 per cent.