Hero MotoCorp shares rally 5% after Q2 PAT, revenue see double-digit growth. Should you invest?

Shares of India's leading two-wheeler maker Hero Motocorp (HMCL) rallied 5% to their day’s high of Rs 4,835.90 on the BSE after the company reported 14% growth in its standalone net profit at Rs 1204 crore in the second quarter.

Revenue from operations in the reporting period rose 11% YoY to Rs 10463 crore.

The company reported an EBITDA of Rs 1516 crore in the reporting period, which was up about 14% YoY. Margins for the same period improved 40 bps to 14.5%.


The company also reported its highest-ever quarterly revenue from part, accessories, and merchandising at Rs 1456 crore.

Here is what analysts say about the stock post its Q2 results:

Nomura: Buy | Target price: Rs 5,805

Nomura has maintained a Buy rating on Hero MotoCorp, raising the target price to Rs 5,805 from Rs 5,663, reflecting a potential upside of 26% from the current market price of Rs 4,604. The brokerage highlights rural market improvement as a key catalyst for growth.

Hero MotoCorp’s Q2 results met expectations, showing healthy earnings growth and attractive valuations, with room for margin improvement. Nomura expects the two-wheeler (2W) industry to grow by 10% over FY25-26, supported by favorable monsoon conditions and a rural market recovery.

Motilal Oswal: Buy| Target price: Rs 5,420

Motilal Oswal expects HMCL to deliver a volume CAGR of 7.5% over FY25-27E, driven by new launches in the 125cc, scooters, and premium segments and a ramp-up in exports. HMCL will also benefit from a gradual rural recovery, given strong brand equity in the economy and executive segments.

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Nuvama: Buy| Target price: Rs 6,200

The company is well-placed to benefit from the 2W industry upcycle in rural/urban areas with strong brands, recent launches such as Xtreme 125R, and upcoming variants such as Vida Z EV in 2.2-4.4KWH range, Xpluse 210, Xtreme 250R, Karizma XMR 250 and Xoom 125/160.

HMCL is a key beneficiary of the likely uptick in rural demand owing to its wide network.

Choice Broking:

The domestic brokerage firm expects HMCL to benefit from rural recovery on the expectation of normal monsoon, rural recovery, and traction in the entry-level bikes by new customers. Further, as a long-term strategy road map such as a showroom revamp, and upgradation of the portfolio with new launches will support volume growth better than the industry.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)