Hero MotoCorp shares were moving northward in trade on Friday, with the stock rising as much as 2.90% to an intraday high of Rs 5,784.35 per share.
At 10:58 am, Hero MotoCorp shares were trading at day's high of Rs 5,784 apiece. In comparison, the BSE Sensex was trading 0.49% lower at 78,563.
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The stock gained after the two-wheeler major reported a healthy set of June quarter numbers, with revenue and net profit beating Street estimates, while EBITDA was in line with expectations.
Hero MotoCorp Q1FY27 Highlights
On a standalone basis, revenue jumped 35.7% year-on-year (YoY) to Rs 12,999 crore from Rs 9,579 crore, ahead of the estimated Rs 12,430 crore.
EBITDA rose 25% to Rs 1,727 crore from Rs 1,382 crore, in line with the Street estimate. However, the EBITDA margin contracted to 13.3% from 14.4% in the year-ago quarter.
Net profit increased 29% year-on-year to Rs 1,454 crore, compared with Rs 1,126 crore a year ago and the estimated Rs 1,246 crore.
Margins Remain A Key Monitorable
Despite the strong topline growth, margins remained under pressure amid rising commodity costs.
Hero MotoCorp's management has maintained its 14-16% margin guidance for FY27, but the Q1 margin of 13.3% came below that range. The company may also need to take higher price hikes to offset cost pressures, according to analyst commentary.
What Morgan Stanley, Citi Said
Morgan Stanley maintained its 'Overweight' rating on Hero MotoCorp with a target price of Rs 6,537, calling the Q1 performance better than expected.
The brokerage highlighted 35% topline growth, driven by 23% volume growth and an 11% increase in average selling price (ASP).
Meanwhile, Citi retained its 'Buy' rating with a target price of Rs 6,800, saying Q1FY27 results were above estimates, supported by higher ASPs and cost-control measures.
Citi noted that the EBITDA beat reflected cost-reduction efforts, even as gross margin came in below expectations.
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