Hero MotoCorp rises on hopes of demand revival

Reuters Bengaluru | Updated on July 31, 2019


The shares of Hero MotoCorp has risen as much as 4.9 percent to ₹2,369.9, mark sharpest intra-day gain in nearly three weeks.

Amid an industry-wide slump in demand, Jefferies says the two-wheeler maker posted an in-line first-quarter performance, and its management sounded hopeful of a retail recovery in first half

A brokerage says Hero's first-quarter earnings before interest, tax, depreciation, and amortization (EBITDA) at ₹1,158 crore and EBITDA margin at 14.4 percent was largely in line with estimates, as a miss in gross margin was offset by low costs.

The company has posted better-than-expected 38.3 percent jump in after-tax profit helped by a one-off gain. The profit before tax and one-off gains declined 15.4 percent

The CIMB says Hero MotoCorp could be a beneficiary of easing concerns over rainfall and the government's focus on supporting rural customers.

The stock, which reversed course after opening 1.5 percent lower at a May 2014-low, is among the top percentage gainers on the NSE index. The stock was down 27.2 percent this year as of the last close, while rival TVS Motor Co Ltd down 39.7 percent.

Published on July 31, 2019

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