Hero MotoCorp Q4 Review: Rural Revival, Strong Brand Equity To Aid Growth, Says Motilal Oswal— Maintains 'Buy'

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Motilal Oswal Report

Hero MotoCorp Ltd.’s Q4 FY25 margins remained stable YoY and were also in line with our estimates. Reported Ebitda margin came in at 14.2%, while ICE margins stood at 16.1%, adjusted for the Rs 1.43 billion loss in EV business.

We expect Hero MotoCorp to deliver a volume CAGR of ~5% over FY25-27, driven by new launches and a ramp-up in exports. Hero MotoCorp will also benefit from a gradual rural recovery, given strong brand equity in the economy and executive segments. The stock looks attractive at ~16.6x/15.3x FY26E/27E EPS.

We reiterate Buy with a target price of Rs 4,761 (17x FY27E EPS + Rs 110/Rs 140 for Hero FinCorp/ Ather post 20% Holdco discount).

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