Hero MotoCorp Sees Price Target of Rs 6300: Prabhudas Lilladher

Hero MotoCorp (HMCL) Research Report

Key Highlights

• Hero MotoCorp has significant growth opportunities in scooters (including EVs), global markets, premium motorcycles, and Parts and Accessories (PAM) business.
• The company is expanding capacities and intensifying marketing efforts, driven by improving rural sentiments following a good monsoon and favorable festive season in Q3FY26.
• Sentiments are expected to remain positive in the upcoming months, although industry growth may be moderated post H1FY27 and require monitoring.

Outlook and Valuation

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We maintain an Accumulate rating for Hero MotoCorp with a target price of Rs6,300 (previously Rs6,575). Our valuation is based on a price-to-earnings (P/E) multiple of 20x for the core business (previously 21x) in September 2027 estimates. Additionally, we value the company's stake in Hero FinCorp at Rs50 and Ather Energy at Rs300.

Financial Projections

We estimate the following compound annual growth rates (CAGR) for Hero MotoCorp:

• Volume growth: 5.7%
• Realization growth: 3.6%
• Revenue growth: 9.5%
• EBITDA growth: 10.8%
• APAT (Attributable Profit After Tax) growth: 10.1% over the period FY25-28E.