HEROMOTOCO - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.2
| Stock Code | HEROMOTOCO | Market Cap | 1,17,036 Cr. | Current Price | 5,852 ₹ | High / Low | 6,390 ₹ |
| Stock P/E | 24.4 | Book Value | 1,051 ₹ | Dividend Yield | 2.82 % | ROCE | 31.5 % |
| ROE | 23.8 % | Face Value | 2.00 ₹ | DMA 50 | 5,700 ₹ | DMA 200 | 5,247 ₹ |
| Chg in FII Hold | 0.67 % | Chg in DII Hold | -0.04 % | PAT Qtr | 1,393 Cr. | PAT Prev Qtr | 1,126 Cr. |
| RSI | 58.8 | MACD | -35.6 | Volume | 5,04,827 | Avg Vol 1Wk | 4,78,194 |
| Low price | 3,323 ₹ | High price | 6,390 ₹ | PEG Ratio | 1.05 | Debt to equity | 0.01 |
| 52w Index | 82.5 % | Qtr Profit Var | 15.7 % | EPS | 240 ₹ | Industry PE | 30.0 |
📊 Analysis: Hero MotoCorp (HEROMOTOCO) demonstrates strong fundamentals with ROE (23.8%) and ROCE (31.5%), supported by a debt-free balance sheet (0.01). The P/E (24.4) is below industry average (30.0), making valuations attractive relative to peers. Dividend yield (2.82%) adds income support. PEG ratio (1.05) suggests growth is fairly priced. Current price (₹5,852) is above both 50 DMA (₹5,700) and 200 DMA (₹5,247), showing bullish momentum, though MACD (-35.6) indicates near-term weakness. RSI (58.8) reflects neutral-to-slightly overbought conditions. The ideal entry zone lies between ₹5,600–₹5,750 for long-term investors. If already holding, maintain positions for 3–5 years, leveraging strong fundamentals and dividends, but consider partial profit booking near ₹6,300–₹6,390 resistance levels.
✅ Positive
- Strong ROE (23.8%) and ROCE (31.5%) highlight efficient capital use.
- Debt-to-equity ratio (0.01) ensures financial stability.
- Quarterly PAT growth (₹1,393 Cr vs ₹1,126 Cr) shows earnings momentum (+15.7%).
- Dividend yield (2.82%) supports long-term holding.
- FII holdings increased (+0.67%), reflecting foreign investor confidence.
⚠️ Limitation
- MACD (-35.6) indicates weak near-term momentum.
- DII holdings decreased (-0.04%), showing cautious domestic sentiment.
- Stock trading near 52-week high (₹6,390), limiting immediate upside.
📉 Company Negative News
- Near-term technical weakness with MACD in negative territory.
- Stock close to resistance zone, limiting short-term appreciation.
📈 Company Positive News
- EPS at ₹240 reflects strong earnings base.
- Quarterly profit growth highlights operational resilience.
- Debt-free balance sheet enhances long-term sustainability.
🏭 Industry
- Automobile sector benefits from rising demand in two-wheelers and rural consumption.
- Industry PE (30.0) is higher than Hero MotoCorp, making the stock relatively undervalued.
🔎 Conclusion
Hero MotoCorp is a fundamentally strong company with attractive valuations, high ROE/ROCE, and a debt-free balance sheet, making it a solid long-term candidate. Ideal entry is around ₹5,600–₹5,750. Existing holders should maintain positions for 3–5 years, leveraging dividends and growth, while booking profits near ₹6,300–₹6,390 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (Bajaj Auto, TVS Motor, Eicher Motors) so you can compare Hero MotoCorp’s valuation and profitability against its closest two-wheeler peers?