HEROMOTOCO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | HEROMOTOCO | Market Cap | 1,02,026 Cr. | Current Price | 5,099 ₹ | High / Low | 6,390 ₹ |
| Stock P/E | 20.2 | Book Value | 1,051 ₹ | Dividend Yield | 3.24 % | ROCE | 31.5 % |
| ROE | 23.8 % | Face Value | 2.00 ₹ | DMA 50 | 5,305 ₹ | DMA 200 | 5,288 ₹ |
| Chg in FII Hold | 1.72 % | Chg in DII Hold | -1.59 % | PAT Qtr | 1,439 Cr. | PAT Prev Qtr | 1,393 Cr. |
| RSI | 45.4 | MACD | -69.2 | Volume | 4,92,867 | Avg Vol 1Wk | 5,47,780 |
| Low price | 3,710 ₹ | High price | 6,390 ₹ | PEG Ratio | 0.87 | Debt to equity | 0.01 |
| 52w Index | 51.8 % | Qtr Profit Var | 19.6 % | EPS | 247 ₹ | Industry PE | 31.2 |
Positive
- Strong ROE (23.8%) and ROCE (31.5%) highlight excellent efficiency.
- Very low debt-to-equity ratio (0.01) ensures financial stability.
- EPS of ₹247 reflects robust profitability.
- Dividend yield of 3.24% provides attractive income.
- Quarterly PAT growth of 19.6% shows steady earnings momentum.
- FII holdings increased (+1.72%), signaling foreign investor confidence.
Limitation
- Current price (₹5,099) below both 50 DMA (₹5,305) and 200 DMA (₹5,288), reflecting weak technical sentiment.
- RSI at 45.4 and MACD (-69.2) show neutral-to-bearish momentum.
- DII holdings decreased (-1.59%), indicating reduced domestic institutional support.
- P/E ratio of 20.2 is below industry average (31.2), suggesting undervaluation but also slower growth expectations.
Company Negative News
- Technical weakness with price trading below key moving averages.
- Decline in DII holdings adds pressure on sentiment.
Company Positive News
- Quarterly PAT improved to ₹1,439 Cr. from ₹1,393 Cr.
- FII stake increased, reflecting foreign confidence.
- Strong dividend yield enhances shareholder value.
Industry
- Auto sector showing recovery with demand for two-wheelers improving.
- Industry P/E at 31.2 highlights premium valuations compared to Hero MotoCorp’s lower multiple.
- Competitive advantage lies in Hero’s brand leadership, extensive distribution, and rural market penetration.
Conclusion
Hero MotoCorp demonstrates strong fundamentals with high efficiency, low debt, and attractive dividends. However, technical indicators remain weak, and reduced DII support warrants caution.
Entry Zone: Attractive accumulation range between ₹4,950–₹5,050 near support levels.
Long-Term Guidance: Suitable for investors seeking stability and dividends in the auto sector. Expect moderate returns with potential upside once technical momentum strengthens.
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