Shares of Hero MotoCorp (HMCL) hit an over four-month high of Rs 2,866, rising 3 per cent in Thursday’s intra-day trade. The stock has surged 8 per cent in the past three trading days on the BSE ahead of the first electric product (EV) product launch, expected in March.
The stock of country’s largest two wheeler maker was trading at its highest level since October 20, 2021, and has recovered 24 per cent from its 52-week low of Rs 2,310.50 on December 20, 2021. It had hit a 52-week high of Rs 3,628.55 on February 8, 2022.
That apart, the stock will also turn ex-date for interim dividend of Rs 60 per share on Monday, February 21, 2022. The board of directors of the company had recently approved interim dividend at 3,000 per cent i.e. Rs 60 per equity share (face value of Rs 2 per equity share) for the financial year 2021-22. The board had fixed February 22, 2022 as record date for determining entitlement of members for the purpose of payment of interim dividend.
At 09:52 am, the stock was trading 2 per cent higher at Rs 2,835, as compared to 0.12 per cent decline in the S&P BSE Sensex.
HMCL has already tied up with Bengaluru-based Ather’s fast-charging technology and owns around 38 per cent stake in the company. Similarly, it has formed a joint venture with Taiwan based Gogoro in which it has pumped in $285 million to develop battery swapping platform.
The management foresees bounce back in demand in FY23E supported by highest ever Consumer confidence index in the past two years, healthy Rabi crop season and opening of schools and colleges.
Analysts at Emkay Global Financial Services expect a gradual recovery in domestic volumes, supported by improving macros and the opening of educational institutions/offices. “Stock catalysts include a rebound in two-wheelers demand and incremental announcements on the EV business,” the brokerage firm said. It has a “Buy” call with a target price of Rs 3,700.
Menawhile, Hero FinCorp had recently raised Rs 2,000 crore, which would increase its AUM by ~2x from present Rs 26,000 crore and not require additional funds in the coming three to four years. In contrast, for Ather, HMCL will support the same in case of needs, analysts at ICICI Securities said in result update.
“The joint venture (JV) with Gogoro for battery swapping technology would be solely for HMCL. The JV, when established, will evaluate if it is necessary to open it for other players depending upon market conditions. HMCL expects EV scooters to improve share of scooters in its product mix, the brokerage firm said. It retains HOLD rating amid slower than anticipated volume recovery and await EV product offering by the company before turning decisively positive,” it added.
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