Mar'25 View on Hero MotoCorp Ltd

Hero Moto Corp earlier also known as “Hero Honda” is one of India’s first motorcycle manufacturers. The company started in 1984 as a Technological collaboration with Honda, Japan. Before this collaboration, Hero was selling Cycles under the brand name, Hero Cycles. In 2011, Honda group sold its 26% stake in the company to the Munjals (promoters) and ended the JV. Post the termination of JV, the name of the company was changed to Hero Motocorp. The company looks to maintain a good trend in coming months with consumption boom coming due to Income tax benefits • Revenues increased by 5% yoy, 2.3% above our estimates. • Gross margin expanded by 90 bps qoq in Q3FY25. • EBITDA margin came in at 14.5% (+50 bps yoy), 30 bps above our estimates. • Net profit came in at Rs1,203 cr, 9.4% above our estimates.• Q3FY25: EBITDA 4% above our estimates, due to better-than-expected gross margin. • We expect 2W industry growth momentum to continue in coming quarters. • Retail market share trend remains muted; festive performance was better. • Market share gain for HMCL would be challenging, despite a slew of launches. • We expect earnings per share (EPS) to grow by 9.1% in FY26E and by 8.4% in FY27E.