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Hero MotoCorp is based in India and is the largest two-wheeler manufacturer in the world; thus, its power has a large impact globally in the motorcycle sector. Particularly it was named Hero Honda which emerged behind Hero Cycles and Honda Motor company cooperation it controlled the Bike market of India and was identified with reliability, efficiency and quality bikes. In year 2011, Hero had separated from Honda and evolved into Hero moto corp, which holds same faith of innovation and best customer satisfaction with the Indian Bike Market.
Some of Hero MotoCorp’s prominent models include Splendor, Passion, Glamour, Karizma and so on and each model has entirely distinct requirement and preferences by the customers-urban commuters and sports bikes. Most importantly, with four-stroke technology the company offered the fuel efficient and environmentally friendly range of bikes in the Indian market. In the years that followed, Hero MotoCorp added models that were technologically superior and conforming to emission norms for a company that was increasingly becoming environmentally conscious.
Hero MotoCorp has a ground-level connectivity with the help of a large number of distribution and service centres both in the rural and the urban landscape of India. Through sheer numbers of bikes sold and the amount of money invested in products made especially for its consumers, Hero MotoCorp has grown to become the household name of the two-wheeler industry with a strong focus on sustainability.
Hero MotoCorp Limited (NSE: HEROMOTOCO) is trading at INR 4,813.5 as of writing, a 4.12% decrease (-207 INR). The company current market cap stands at 961.314 billion INR, with a 5-year beta of 0.94, a trailing P/E ratio of 23.61 and an EPS of 203.57.
Hero MotoCorp next earnings date is expected between November 4th and November 9th 2024. The forward dividend yield is 2.30% (INR 115.00), with the ex-dividend date on August 1, 2024.
Evaluations of Hero MotoCorp established financial robustness and market position, widely suggesting an appropriate investment bet.
As of the end of November 1st 2024 the company has an enterprise value of 954.13 billion INR to current investors thus reflecting a strong confidence in the company. The current P/E ratio is 24.49 while the forward P/E ratio is 20.53, in an expected earnings growth.
Also, if we look at its price-to-sales (P/S) ratio of 2.57,and price-to-book (P/B) ratio of 5.64 which are slightly higher than its current revenue or book value.
The firm has an enterprise value to revenue ratio of 2.45, and its enterprise value to EBITDA ratio is 14.97, metrics that underscore its efficiency in generating returns relative to its operational scale and earnings. These measures suggest that Hero MotoCorp is well-positioned within the market and has promising prospects for revenue growth and profitability.
The financial performance of Hero MotoCorp shows good profitability where profit margin is at 10.42% with total revenue of 391.48 billion INR in a trailing twelve-month (TTM) basis. Net income was 40.81 billion INR that suggests the company has good efficiency in turning sale into earnings. The diluted EPS of 203.57 INR shows good and sound earnings per share signifying earnings per share profitably on the stock.
Returning to the balance sheet side, Hero MotoCorp has INR 49.74 billion cash, which speaking about its good liquidity. The company also maintains a conservative approach to leverage with a low debt-to-equity ratio of 3.40%. This enhances its financial stability. This strong cash reserve and low debt-to-equity ratio provide the company with significant flexibility for future investments, research and development and growth initiatives.
The business has exhibited handsome returns in every period, and over time it has been higher than S&P BSE SENSEX. The company has posted a year-to-date (YTD) return of +18.89%, well above the SENSEX’s +9.01% gain, indicating strong performance in the current year.
For longer periods, Hero MotoCorp returns continue to outpace the benchmark:
1-Year Return: +59.30% vs +22.35% (S&P BSE SENSEX)
3-Year Return: +100.10% vs +31.75% (S&P BSE SENSEX)
5-Year Return: +104.70% vs +96.06% (S&P BSE SENSEX)
Such returns establish Hero MotoCorp’s long-term endurance and capacity for growth, demonstrating that it has outperformed not only the general industry in the last several years and months but also various time horizons.
The stock has recently shown signs of weakness, breaking below the critical support level of 5,000 INR, a psychological level. This breakdown suggests potential downside pressure, with the next key support level appearing at 4,182 INR. With the current market price at around 4,807 INR as of writing, the stock is positioned in a vulnerable area, where further declines could accelerate if downward momentum persists.
Additionally, the upcoming U.S. elections on November 5th, 2024, could introduce further volatility across global markets, including the Indian stock market. Election outcomes in the U.S. often impact investor sentiment worldwide, especially due to potential shifts in trade, economic and foreign policies.
Such uncertainty may lead to increased fluctuations in Hero MotoCorp stock price, as foreign investor flows and market sentiment respond to the election results. Expect volatility in the coming days, with possible price action testing the lower support level
Hero MotoCorp continues to solidify its position as a leader in the two-wheeler industry with a strong product portfolio, extensive distribution network, and consistent financial performance. Despite recent market volatility and technical challenges, including the breakdown of key support levels, the company’s long-term outlook remains promising. Strong returns over recent years demonstrate investor confidence, and the upcoming U.S. elections may introduce further market fluctuations.
With robust fundamentals, low leverage, and a strong cash position, Hero MotoCorp is well-prepared to navigate both challenges and opportunities. Investors should remain mindful of market volatility, while focusing on Hero MotoCorp’s resilient growth trajectory as it aims to deliver value in the years ahead.
