⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
HEROMOTOCO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | HEROMOTOCO | Market Cap | 1,08,341 Cr. | Current Price | 5,415 ₹ | High / Low | 6,390 ₹ |
| Stock P/E | 21.5 | Book Value | 1,051 ₹ | Dividend Yield | 3.05 % | ROCE | 31.5 % |
| ROE | 23.8 % | Face Value | 2.00 ₹ | DMA 50 | 5,586 ₹ | DMA 200 | 5,325 ₹ |
| Chg in FII Hold | 0.67 % | Chg in DII Hold | -0.04 % | PAT Qtr | 1,439 Cr. | PAT Prev Qtr | 1,393 Cr. |
| RSI | 46.1 | MACD | -73.4 | Volume | 4,05,043 | Avg Vol 1Wk | 4,66,965 |
| Low price | 3,323 ₹ | High price | 6,390 ₹ | PEG Ratio | 0.93 | Debt to equity | 0.01 |
| 52w Index | 68.2 % | Qtr Profit Var | 19.6 % | EPS | 247 ₹ | Industry PE | 29.0 |
📊 Core Financials
- Quarterly PAT rose from ₹1,393 Cr. to ₹1,439 Cr. (~3% sequential growth, ~19.6% YoY growth).
- ROE: 23.8% → strong profitability.
- ROCE: 31.5% → excellent capital efficiency.
- Debt-to-equity: 0.01 → virtually debt-free, strong financial health.
- Dividend Yield: 3.05% → attractive shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 21.5 vs Industry PE 29.0 → undervalued relative to peers.
- P/B Ratio: 5.15 (Current Price ₹5,415 / Book Value ₹1,051) → fair for auto sector.
- PEG Ratio: 0.93 → valuation supported by earnings growth.
- Intrinsic Value: Current price near fair value, offering long-term upside potential.
🏢 Business Model & Competitive Advantage
- Hero MotoCorp is India’s largest two-wheeler manufacturer with strong domestic and global presence.
- Business model relies on mass-market motorcycles and scooters, supported by wide distribution.
- Competitive advantage: Scale, brand trust, and strong rural penetration.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹5,200–₹5,350 (close to support levels, RSI at 46.1 indicates neutral momentum).
- Long-Term Holding: Suitable for investors seeking stable dividends and growth in India’s two-wheeler market.
✅ Positive
- Strong profitability with ROE of 23.8% and ROCE of 31.5%.
- Debt-free balance sheet ensures financial stability.
- Dividend yield of 3.05% provides attractive shareholder returns.
- FII holdings increased (+0.67%), showing foreign investor confidence.
⚠️ Limitation
- Stock trading below 50 DMA (₹5,586) and 200 DMA (₹5,325), indicating weak momentum.
- MACD at -73.4 signals bearish technical trend.
- DII holdings decreased (-0.04%), showing slight reduction in domestic institutional support.
📉 Company Negative News
- Stock price corrected from 52-week high of ₹6,390 to current ₹5,415.
- Technical indicators suggest short-term weakness.
📈 Company Positive News
- Quarterly PAT grew ~19.6% YoY, showing operational strength.
- Strong dividend payout supports long-term investors.
🌐 Industry
- Automobile industry PE at 29.0, higher than Hero MotoCorp’s 21.5, showing relative undervaluation.
- Industry growth driven by rising rural demand, electrification, and premiumization trends.
🔎 Conclusion
- Hero MotoCorp is fundamentally strong with excellent profitability, low debt, and attractive dividends.
- Valuation is reasonable compared to peers, offering long-term upside.
- Best strategy: Accumulate near ₹5,200–₹5,350 and hold long-term to benefit from India’s two-wheeler growth story.