HEROMOTOCO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.4

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹1,161 Cr vs ₹1,108 Cr — ↑24.2% QoQ growth, strong earnings momentum.

EPS: ₹219 — robust, supports valuation.

ROE (23.0%) & ROCE (30.3%) — excellent return metrics, indicating strong capital efficiency.

💰 Cash Flow & Debt

Debt-to-Equity: 0.04 — negligible debt, very healthy balance sheet.

Dividend Yield: 3.81% — high yield, attractive for income-focused investors.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 20.3 Undervalued vs industry PE of 31.1

P/B Ratio ~4.48 Reasonable for a high ROE company

PEG Ratio 0.85 Indicates undervalued growth

Intrinsic Value Estimated ~₹4,800–₹5,200 Based on earnings and sector multiples

🏍️ Business Model & Competitive Advantage

Sector: Two-wheeler manufacturing — dominant player in commuter segment.

Brand Strength: Hero MotoCorp is the largest two-wheeler manufacturer globally.

Distribution: Extensive rural and urban reach across India.

Competitive Edge: Cost leadership, strong brand recall, and fuel-efficient models.

EV Transition: Gradual but strategic entry into electric mobility via Vida brand.

📉 Technical & Sentiment Indicators

RSI: 50.6 — neutral zone, no strong momentum.

MACD: 7.28 — bullish crossover, early signs of upward momentum.

DMA 50 & 200: Price hovering around both — consolidation phase.

Volume: Slightly below average — watch for breakout confirmation.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹4,200–₹4,350 — current price is within fair value range.

Ideal for accumulation, especially if price dips toward ₹4,000 with stable fundamentals.

📈 Long-Term Holding View

Strong buy for long-term investors.

Attractive valuation, high dividend yield, and strong return metrics.

EV strategy and rural demand recovery could be future growth drivers.

Hold with a 3–5 year horizon for potential upside toward ₹5,500–₹6,000.

Want a side-by-side comparison with Bajaj Auto or TVS Motor to explore sector dynamics?

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