Hero Honda is a robust brand: Seshadri Bharathan

Seshadri Bharathan, MD & CEO, KSEMA Fincon Ltd.

What your view would be on Hero Honda?

Seshadri Bharathan: Hero Honda as a brand is very strong, distribution is pretty strong. We need to see the fine print to understand the R&D because it was always a technology transfer happening from Honda to Hero Honda so we need to see what kind of understanding the company has with Honda for R&D. As far as the business goes I think company is witnessing robust sales numbers.

Last quarter we saw 12% year on year growth 4%, sequential growth for the company. Yes margins got hit but I think with improving monsoon and robust demand and the ability of the market to absorb the price increase the company would be able to come back to margin of 15% to 16%. Stock currently trades around 14 times FY11 EPS of around Rs126. So my target in this would be for one year horizon would be around Rs2016 which is 16 times FY11 earning.