InCred Equities Upgrades Hero MotoCorp to ‘Add’ Rating, Sees Buying Opportunity After Stock Dip

Shares of Hero MotoCorp, the world’s largest two-wheeler maker, have been falling since their peak in June. The decline is due to disappointing results in the June quarter, where the company’s profits were hit by lower average selling prices. Increased competition, especially with new CNG bikes, rising demand for premium models, and a growing electric vehicle (EV) market, has also added pressure. Additionally, weak demand in rural areas has further hurt the stock.

Currently, Hero MotoCorp’s stock is trading 11% below its June all-time high of ₹5,894. This drop has made the stock more attractively priced. Seeing this as an opportunity, InCred Equities has upgraded its rating on Hero MotoCorp to ‘Add’ from ‘Hold’ and increased the target price to ₹5,812 per share from ₹4,766. They believe the stock’s recent decline offers a good chance for investors to buy.

InCred Equities is optimistic about Hero MotoCorp’s future, especially as the rural market recovers with better rainfall and supportive government policies. The company has made gains in market share, particularly in the 125cc segment, and is planning to increase production of its popular Hero Xtreme 125cc bikes.

The brokerage also sees limited competition from OLA’s new EV bike, as it could take OLA up to three years to establish a strong presence in the motorcycle segment. Hero MotoCorp is focused on expanding its EV offerings and improving its internal combustion engine (ICE) vehicles.

Hero MotoCorp is also expanding into Southeast Asia to boost its export business, although demand varies by region. InCred Equities believes that Hero MotoCorp is well-positioned for future growth and sees the current stock price as a good entry point for investors.