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Target: ₹3,700
CMP: ₹2,927.05
Hero MotoCorp Ltd has upped the game with exciting back-to-back launches of HD X440 and Karizma XMR in the premium segment. Both these launches address key void in HMCL’s premium product portfolio.
We expect products’ blitz to continue across the portfolio. Initial dealer feedback on HD X440 and Karizma XMR is quite positive. The company has been spot-on wrt. product styling and pricing, based on dealer feedback.
Our channel checks suggest continued customer excitement for HD X440 and a further step-up with the launch of Karizma XMR. Recently launched ‘Passion+’ has also been received well. These launches are driving higher customer footfalls and are expected to have a positive rub-off on the existing and refreshed models. Product pipeline remains robust with more new launches over the next few quarters.
In our view, HMCL is strengthening its market position and seems to be making a strong comeback as an all-round 2W player. 2W replacement demand is overdue and expected rural recovery during 2H will drive volumes.
HMCL is our top pick in the 2W space, followed by TVSL. We reiterate Buy with a June 2024 target of ₹3,700 (16x FY25 EPS). Recovery in rural demand will be a key monitorable.
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