Fwd: Hero MotoCorp Q2FY12 Result Update; Strong show, Upgrade to Accumulate; Target: Rs 2,250

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Deepak Vaishnav

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Oct 22, 2011, 4:08:53 AM10/22/11
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Hero MotoCorp Ltd.

Strong show, Upgrade to Accumulate

 

ACCUMULATE

 

CMP: Rs 1,985                                       Target Price: Rs 2,250

n     Results above est. with EBIDTA at 7.1bn (est of Rs 6.8bn) and APAT of Rs 6bn (est. of Rs 5.7bn).  Surprised by high treasury income despite a 25% drop in treasury book

n     Demand outlook remains robust. Revise our FY12/13 EPS est. upwards by 5%/5% to 123/145 due to higher volumes. Upgrade FY12/FY13 by volumes by 2% to 6.35mn/7.1mn units

n     Factoring in full capacity utilization for 2HFY12 (~13% volume growth in 2H). Capacity ramp up can result in further volume upgrades for FY12

n     Upgrade rating to ACCUMULATE and revise our TP to Rs2,250 (FY13 PER 15.5x). Continue to have concerns with concentrated product portfolio/ lack of clarity on R&D

 

Regards,

Chirag Shah

Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : chira...@emkayglobal.com 

Board No. : +91-22-66121212 | Extn. : 252 | DID : 66121252 | Mob : +919820580701 |

 

 


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Hero MotoCorp Q2FY12 Result Update.pdf
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