Brokerages remained positive on Hero MotoCorp Ltd. after its March-quarter results, with JPMorgan, Citi and Morgan Stanley all maintaining bullish ratings and lifting or reiterating higher target prices, citing resilient demand, pricing gains and cost controls.
Hero MotoCorp Ltd. 's net profit saw a 30% uptick for the fourth quarter of the fiscal 2025-26, according to an exchange filing from the company on Tuesday. The company's net profit increased to Rs 1,401 crore YoY (year-on-year) compared to a Rs 1,081 crore, in the year ago period. The firm's revenue rose 29% YoY to Rs 12,797 crore from Rs 9,939 crore in the previous fiscal.
The current market price of Hero MotoCorp Ltd is Rs 5,127.00, which implies an upside of 24.5% to JPMorgan's target price of Rs 6,385, 34.6% to Citi's target price of Rs 6,900, and 27.5% to Morgan Stanley's target price of Rs 6,537.
JP Morgan
JPMorgan maintained its 'overweight' rating on the stock with a target price of Rs 6,385. The brokerage said in the fourth quarter, pricing and fixed cost management offset commodity pressures, adding that there were no material negative trends in the results. However, it said the key questions going forward would be the sustainability of industry growth, market share sustenance and commodity pressures.
Citi
Citi also retained its positive stance, maintaining a 'buy' rating with a target price of Rs 6,900. It described the fourth-quarter results as showing EBITDA slightly ahead of estimates, while PAT was in line due to lower other income. Citi said demand has remained robust post GST cuts, while Hero MotoCorp's efforts in boosting market shares in scooters and EVs are gradually fructifying. It added that cost-reduction initiatives are supporting margins. At the same time, Citi flagged a possible inflationary macro-environment and any adverse rural income trend as potential headwinds.
Morgan Stanley
Morgan Stanley maintained its 'overweight' rating with a target price of Rs 6,537, against the current market price of Rs 5,127.00. The brokerage said the results were in line with estimates. It noted that ASPs grew 2.7% quarter-on-quarter, while gross margin fell 110 basis points quarter-on-quarter and EBITDA margin declined 20 basis points quarter-on-quarter.
The brokerage remains constructive on Hero MotoCorp despite margin pressure from commodities, with pricing, fixed cost management, demand strength and cost-reduction efforts seen as key supports.
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