Hero MotoCorp Limited is the world's largest manufacturer of two wheelers and almost the No.1 Two-Wheeler Manufacturer in India. The Company is engaged in the manufacturing and selling of motorized two-wheelers, spare parts, and related services. The Company has over 9.50 million annual production capacity across 8 manufacturing facilities i.e., 6 in India and one each in Colombia and Bangladesh. In 37 years, company has expanded its presence in 43 countries through 9000+ customer touch points and served more than 110Mn customers. Company spends Rs. 760 crores on R&D and has 750+ patents on its name. Company offers a wide range of products in different segments and different segments which includes Splendor and Splendor +, HF 100 and HF Deluxe in Practical biking segment, Glamour and Glamour XTEC, Passion + and Passion XTEC, Super Splendor and Super Splendor XTEC in Executive biking segment, Xtreme 200s 4V, Xtreme 160R 4V, XPULSE 200 4V, XPULSE 200T 4V and XTREME 160R under Performance biking segment, Destini Prime and 125 XTEC, XOOM and Pleasure + XTEC under Scooter Segment. Company’s latest launch includes Mavrick 440, Xtreme 125R, Karizma XMR, Harley Davidson X440. In FY23, Splendor became the World’s highest selling two-wheeler.  Company’s Global Product portfolio includes ECO Deluxe and ECO 150, Hunter 100 and Hunter 125, Xpulse 200, Thriller 160R, Dash 110 and 125, Hunk 150 and 160R and Ignitor 125. Its Harley Davidson portfolio includes Fatboy, Fatbob, Heritage Classic, Street Glide, Pan America, Nighster, Nightster special, Sportster 5 and Road Glide. Company has recently partnered with investment of US$ 60 million and company will be bringing Zero portfolio into India, increasing access for the Indian consumer to the best of international clean mobility options. Company has also invested in Ather Energy where it holds almost 50% share, HPCL and BPCL for charging network expansion. Company’s Parts and Merchandise business also grew at a healthy pace with a 23% growth to touch nearly Rs. 5,000 crores worth of revenues in FY 2022-23 and generated $14.28 million revenue from global business for parts. Company has set its targets to become 500% water positive facility along with 100% Waste Neutral facility, 100% Carbon Neutral operations, 100% Product Recyclability and 100% Green Dealership. In FY23 company recorded 10.52 lakh ENTRY SEGMENT VOLUMES, 36.75 lakh DELUXE SEGMENT VOLUMES, 0.69 lakh PREMIUM SEGMENT VOLUMES and 3.59 lakh SCOOTER SEGMENT VOLUMES with 33.2% market share in 2 -Wheeler segment and almost 47% of market share in Motorcycle segment of India.

Fundamentals (FY23-24):

Financial Results:

Company’s Net Sales was at Rs 9,533.07 crore in September 2023 up by 4.09%, Quarterly Net Profit was at Rs. 1,006.31 crore in September 2023 up by 46.17% and EBITDA stands at Rs. 1,567.65 crore in September 2023 up by 32.8% as compared to September 2022. Company’s EPS has increased to Rs. 50.34 in September 2023 from Rs. 34.45 in September 2022.

Key Updates:

1. Hero MotorCorp enters into the upper premium segment with MAVRICK 440 MOTORCYCLE and strengthen its presence in 125cc SEGMENT with the launch of NEW XTREME 125R and it has also augmented its ‘XOOM’ SCOOTER portfolio with – XOOM 125 AND XOOM 160.
2. Company also paved way for E-MOBILITY with VIDA COUPE and sets new standards for sustainability by showcasing FLEX-FUEL TECHNOLOGY.
3. Hero MotorCorps and Ather Energy, one of India’s leading electric
4. vehicle manufacturers, have entered a partnership for an interoperable fast-charging network in India. As a part of which, EV users will be able to seamlessly use both VIDA and Ather Grids across the country. The combined network will cover 100 cities with over 1900 fastcharging points.
5. Recently the company registered highest ever sales of than 14 LAKH UNITS in 32 – Day Festive Period recording 19% growth.
6. The company has recently unveiled three concept vehicles - Concept 2.5R XTunt, Lynx and Acro as well as three production-ready vehicles - Xoom (125R & 160), Vida V1 Pro and Vida V1 Coupe.
7. It has also announced a slew of strategic initiatives including an extensive growth plans to expand its footprint in electric mobility, enter new ICE vehicles categories and foray into Europe.
8. HERO MOTOCORP recently inaugurated its first STATE-OF- THE ART premium dealership Hero Premia in Calicut, India and its premium range including KARIZMA XMR, HARLEY-DAVIDSON X440 AND VIDA V1 SCOOTERS will be on display.
9. Hero Karizma XMR was launched at an introductory price of INR 1,72,900/- and the bookings for the initial set of customers commenced on August 29th, 2023 and for the same company received a whopping count of 13,688 bookings.
10. Recently the Hero-owned Surge unveils S32 e-scooter/three-wheeler hybrid which is a ground breaking technology entering the Ev market to disrupt 2W and 3W logistics market in a single blow. Surge is aiming to offer the S32 in a variety of different guises which all differ in the design of the rickshaw section.
11. HERO MOTOCORP sold 1,000 HARLEY-DAVIDSON X440 across 100 dealerships during the festive season out of the 25000 bookings received during launch.
12. The company recently onboarded Motosport SA as its partner in Costa Rica – a key market in Central America. The phase-wise expansion plan has begun with the inauguration of the first Exclusive Hero MotoCorp Store in the Uruca, which is an important industrial and commercial area of San José.
13. The company has set a new Guinness World Records Title, providing yet another fillip to the electric vehicle industry as its first electric vehicle, the VIDA V1 scooter ran for 24 hours non-stop and broke the existing world record for maximum distance achieved by nearly 350 kms.
14. Company’s Ev vehicle VIDA has started increasing its presence to 100 cities for which with the help of Hero MotoCorp’s expansive dealer network to rapidly scale up its operations across the country. It has already commenced the expansion plan with eight new cities – Pune, Ahmedabad, Nagpur, Nasik, Hyderabad, Chennai, Calicut and Kochi along with its presence in Bengaluru, Jaipur, and Delhi.

In last 3 Years the stock gave a return of 37.30% as compared to the rise of Sensex and Nifty in the same period.

Hero MotoCorp has been the leading 2-wheeler and Motorcyle manufacturer in India with 37+ years of experience and backed by the trust of Millions of Customers. With the help of its partnerships with Harley Davidson and Zero Mobility the company is set to achieve bigger market share in premium motorcycle segment and EV motorcycle segment respectively. Its stake holding in Ather and its investments in HPCL and BPCL for charging infrastructure expansion showcases the company’s readiness in capturing EV market going further in future. Mutual Fund houses also increased their holdings by 1.24% in the last quarter to 13.73. Considering company’s worldwide presence, remarkable market share in 2-wheeler and motorcycle segment of India, foray into EV sector, partnerships and investments in futuristic companies and technologies and good financial performance investors may invest in this company for long term period.  

HET ZAVERI

info@smartinvestment.in

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