Hero MotoCorp - New Launches To Expand Premium Positioning: Yes Securities

Yes Securities Report

We attended Hero MotoCorp Ltd.'s Hero World 2024 event centered around.

1. New product launches such as, Xtreme 125R motorcycle (all new engine) at Rs 95000 (ex-show, non Anti-lock braking system variant) and Maverick X440 (rebadged of HD X440),

2. Electric Vehicle - product road-map showcase in scooters with targeted launch in varied form factors by H1 FY25. Hero MotoCorp's also showcased the concept EV motorcycles (product development underway) and near production ready ICE scooters such as Xoom 125 and 160.

3. Reiterated focus on premiumisation across products (for both ICE and EV), distribution (ongoing store upgrades of Hero 2.0 and Hero Premia), complemented by digital initiatives for pre and post purchase functions.

4. Scale up global business by strengthening distribution.

5. Faster adoption of digital initiatives including retail financing where co is piloting the same in national capital region.

The company would focus on 4S strategy (Speed, Scale, Synergy and Simplification) to drive up next stage of growth. While we await Maverick pricing, the pricing of Xtreme 125R is competitive given overall customer value proposition.

We maintain 'Add' with target price of Rs 5,021 based on ~19 times March 2026 standalone earning per share plus Rs 118 for Hero FinCorp post 30% hold-co discount. We have raised target multiple to 19 times (versus 18 times) to factor in for improving positioning in premium portfolio.

Any success on newly launched ICE and VIDA supported by Ather’s continued brand acceptance can be a key re-rating catalyst for the stock to watch for.

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