Hero MotoCorp stock price rises after first-quarter earnings; You should buy check what the brokers recommend

Shares of Hero MotoCorp rose about two and a half percent after the main two-wheeler company reported strong numbers for the quarter ending June 30, 2022. According to the company’s regulatory filing, Hero MotoCorp on Friday reported a twofold increase in after-tax consolidated earnings on an annual basis. The bike and tricycle manufacturer’s consolidated profit after tax was Rs 585.58 crore in the quarter ending June as compared to Rs 256.46 crore in the same last financial period.

In response to the strong numbers, Hero MotoCorp stock jumped nearly two and a half per cent in daily trading on Tuesday to 2,844.80 rupees per share on the Bahrain Stock Exchange.

Meanwhile, the majority of brokerages remained largely bullish on Hero MotoCorp despite the good numbers in the quarter ending June 22.

Global brokerage CLSA was of the opinion that margins are disappointing as pressure on raw materials continues. Hero MotoCorp’s gross margin decreased by 350 basis points sequentially. However, I have noted that management remains positive about the growth in demand for H2. CLSA has maintained a performance rating superior to the Hero MotoCorp with a target price of Rs 2,962.

Here’s how other global brokerages rank their counter announcement results for the first quarter of fiscal year 23.

JP Morgan on Hero MotoCorp (CMP: 2762)

Maintaining excess weight, goal raised to 3030 from 2800

Nomura on Hero MotoCorp (CMP: 2762)

Maintain neutrality, target raised to 2876 from 2720

Citi on Hero MotoCorp (CMP: 2762)

Keep buying, reduce target to 3100 from 3200

Meanwhile, brokerage firm LKP Securities maintained a buying target of Rs 3,226 in 12 months.

The brokerage firm’s upside is a good batch of numbers in the first quarter, driven by a solid volume performance. Besides volumes, maintaining margins was the highlight of the quarter due to cost pressures.

“Going forward, we expect a decent volume trajectory with the release of XTech variants in the first quarter and new releases coming. The first EV launch of the holiday season will add further strength. Post-pandemic demand factors remain intact with the rural story staying strong in good monsoons,” the statement added. After the economy opened, normal life prevailed and demand returned to its tracks.”

Earlier, the company sold 13.90,000 units of motorcycles and scooters during the said quarter, an increase of 36 percent over the corresponding period in the previous fiscal year, the company said in a BSE filing.

“A combination of cost-saving measures, prudent price increases, and characterization of the model line-up helped the company maintain its margins despite commodity headwinds and supply chain disruptions due to geopolitical issues,” she added.

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