Hero Motors Slides Sharply: What’s Driving the Fall?
Hero Motors has hit another lower circuit. The stock fell 5% to ₹116.58 on Thursday, following a 10% decline on Wednesday to ₹122.70. It is now down approximately 35% from its October 5 closing price of ₹169.63.
Why is Hero Motors falling so sharply?
- 1. Post-listing profit booking: The stock surged sharply after its September listing, reaching a post-listing high of ₹178.84. The subsequent correction suggests investors are locking in profits after the initial excitement.
- 2. High valuation concerns: The stock's valuation became stretched after its rapid rally. Its reported trailing P/E is around 128, leaving little room for disappointment if earnings growth fails to meet expectations.
- 3. Lower circuits are amplifying the fall: Consecutive circuit-down sessions indicate heavy selling pressure and limited ability for buyers to absorb sell orders at the permitted price. Broader market weakness has also contributed.
- 4. Strong profit growth hasn't prevented selling: Hero Motors reported Q1 FY27 net profit of ₹10 crore, up 145% year-on-year. However, profit declined 36.2% sequentially, and investors may be questioning whether the stock's earlier rally was justified by its earnings base. Unlike