e hero motocorp buy* - nalandasecurities.com€¦ · hero motocorp | q4fy19 - result update | page...

Q4

FY1

9 –

Re

sult

Up

dat

e

April 27, 2019

Hero MotoCorpDownside

Scenario

Current

Price

Price

Target

2,97214.1%

Upside

Scenario

BUY*

2,604A Leader has Bottomed Out..! Getting Ready for the Bounce back

Macros Hit the 4th Quarter Hardest!• Hero MotoCorp on the expected lines reported a weak set of numbers as its

net sales declined by about 8% YoY to Rs. 7,885 crores in the 4th quarter, thiswas majorly on account of 11% YoY decline in the volumes to 17.8L units;offset by uptick in the realization by 350bps YoY to Rs. 44,269 per vehicle forthe same period. Hero’s not only domestic volume sales (-10.7% YoY), butalso exports volumes (-20.3% YoY) has put-up the brakes. The hit on thescooters in the 4th quarter was strong as it declined by 32.6%. The scootersare not fuel efficient and along with price increases has moved the buyerstowards fuel efficient motorcycles. The 2nd half FY19 was hit by multiplemacro-headwinds. The major ones were insurance bouncer, electionsuncertainty and rural distress led by 40% YoY decline in the Rabi sowing.

• The company’s EBITDA Margin declined sharply by 240bps YoY to 13.6% forthe quarter on account 1) increase in the Commodity/RM costs, whichclimbed higher by 130bps YoY to 69% of the net sales. 2) the employee costsjumped higher by 120bps YoY to 5.7% of net sales mainly due to wagerevision 3) operating deleverage 4) increase in the A&P spends and higherdiscounts provided to push volumes. Overall, the bottom line deceleratedsharply by 24.5% YoY to Rs. 730 crores in Q4FY19.

• The spare parts business as well reported a meagre growth of just about 6%YoY to Rs. 791 crores in the 4th quarter.

Grim Short Term Outlook• By looking at the challenging circumstances in the market, we expect the 1st

quarter of FY20E to remain dull. The insurance bouncer, an increase in thevehicle prices and new safety regulations has pushed up the cost ofownership higher. This, along with the uncertainty related to generalelections resulted in a poor off take for the company/industry. We continueto see a de-growth for the month of April 2019 (this is in spite of Navratri,Gudi Padwa, etc.) and a near flattish May 2019. Post general elections, thepositive sentiments from June onwards would aid in picking up the volumes.

• Expectation of 1) a good festive season, 2) prebuying ahead of theimplementation of BS6, 3) a lower base 4) expectation of near normalmonsoons, and 5) further interest rate reduction would make 2nd half FY20Ebetter than the 1st half.

• In FY20E, we think motorcycles to grow at 5.9% YoY, while scooters growth isexpected to remain a little higher at 6.5% for the same period. Overall, we see5.9% volume growth for the next financial year and expect to grow almost in-line with the 2W industry growth. The domestic volumes to grow little slowerthan the exports due to on-going macro issues. The domestic would growabout 5.8% YoY, while exports to clock a growth of 9.6% YoY in FY20E as thebase is lower and the management has plans to enter multi-countries, whichwould support the growth.

Hero MotoCorp vs SENSEX

* Read last page for disclaimer & rating rationale

Market Data

Industry Automobile

Sensex 39,067

Nifty 11,755

Bloomberg Code HMCL:IN

Eq. Cap. (INR Crores) 40

Face Value (INR) 2

52-w H/L 3,819/2,517

Market Cap (INR Crores) 52,008

Valuation Data FY19 FY20E FY21E

OPM 14.7% 15.1% 15.7%

NPM 10.0% 10.2% 10.6%

P/E (x) 15.4 13.9 12.2

EV/EBITDA (x) 10.5 9.1 7.8

Shareholding Pattern (%)

Mar-18 Dec-18 Mar-19

Promoters 34.6% 34.6% 34.6%

FII 41.9% 40.0% 38.2%

DII 12.0% 15.4% 16.1%

Others 11.4% 10.1% 11.1%

Total 100% 100% 100%

(INR Crores) FY17 FY18 FY19 FY20E FY21E

Revenue 28,500 32,230 33,651 36,555 40,467

Growth (%) 0.2% 13.1% 4.4% 8.6% 10.7%

EBITDA 4,635 5,280 4,930 5,520 6,334

Growth (%) 4.0% 13.9% -6.6% 12.0% 14.7%

EBITDA Margin (%) 16.3% 16.4% 14.7% 15.1% 15.7%

PAT 3,377 3,697 3,381 3,735 4,280

Growth (%) 6.9% 9.5% -8.6% 10.5% 14.6%

EPS (INR) 169 185 169 187 214

P/E (x) 17.7 19.0 15.4 13.9 12.2

EV/EBITDA (x) 12.9 13.3 10.5 9.1 7.8

Source: Company, NSPL Research

Institutional Research

70

90

110

130

150

170

04-2

015

07-2

015

10-2

015

01-2

016

04-2

016

07-2

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10-2

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01-2

017

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07-2

017

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07-2

018

10-2

018

01-2

019

SENSEX Hero

Head of ResearchVaibhav Chowdhry vaibhav.chowdhry@ nalandasecurities.com

NALANDA SECURITIES PRIVATE LIMITED310-311 Hubtown Solaris, NS Phadke Marg, Opp Teli Gali, Andheri East, Mumbai 69+91-22-6281-9649 | [email protected] | www.nalandasecurities.com

AnalystAmit Hiranandani amit.hiranandani@ nalandasecurities.com

mailto:[email protected]


Hero MotoCorp | Q4FY19 - Result Update |

Mouth-watering Launches and Renewed Focus to Support Volumes• Hero’s management has identified the reasons for falling market share and renewed its focus on 150-200cc segment (where

buyers are moving) and on the scooters (where Hero is late entrant).• Hero has displayed mouth-watering concepts in the premium segment (200cc & 250cc) and is expected to launch three new

motorcycles viz. Xpulse200, Xpulse 200T and HX250R.• The new ‘Maestro Edge’ scooter would launch next month along with few in the pipeline would push the volumes higher in the

scooters category as well. Hero is naturally stronger in motorcycles and relatively new in the scooters space. Hence, thecompany is putting a lot of hard work to build a new portfolio. The new launches (Destini125cc & Maestro) is getting goodresponse and new exciting scooters are coming up. The management looks aggressive in growing the market share in thescooters.

• Hero MotoCorp is well prepared for BS6 launch and is expected to bring in newer models before the deadline. The pricedifferential between BS4 and BS6 vehicles is a good enough to naturally attract the buyers for a pre-buy. The company will alsotake effective measures to keep the buyers informed.

• The overall demand is strong in North and East parts of India. The Central India has shown a positivity in the month of April andhas seen some recovery in West India due to Gudi Padwa. The South India seems to be a little lower than expected.

• Hero has a strong hold in the lower CC motorcycles and its strategy is clear in the medium term that they want to grow itspresence in the premium motorcycles and scooter segments. This will aid in improving its falling market share over the last fewyears. The company has launched Destiny 125cc scooter and will soon launch new Maestro Edge 125cc scooter. It also launcheda new Xtreme 200cc motorcycle and multiple new launches are in the pipeline. We believe the company’s moat is in low costmanufacturing and its wide distribution reach and Hero’s new launches would provide a stiff competition to the market leadersin the scooter and premium motorcycle. Moreover, the company’s design capabilities also improved, this will aid in arresting itsfalling market share.

Margins to Bounce Back!• We believe the EBITDA Margins have bottomed out and is ready to bounce back gradually in the coming years. The historical

trend of the past 11 years suggests that after every three years, the margins comes at the lowest level and bounces backgradually for the next three years. The margins bottomed in FY07, FY11, FY15 & FY19. Post that, it has shown a gradualreversal in the trend. In FY19, the EBITDA Margins reported was at 14.7% in FY19 and expect a repeat of the historicalperformance.

• This is possible as 1) the commodity prices have stabilized from the last few quarters (expects the trend to continue as Globalgrowth is expected to be slower), 2) focus on the premium motorcycles & scooters and higher realization post BS6 to aid further,3) LEAP, other cost rationalization programs and a combination of multiple things to push up the margins and 4) along withHero’s strategy of taking price increase in baby steps would surely take the margins higher in the coming years. However, forthe next 1-2 quarters, the margins to hover around the current levels as the headwinds and tailwinds are neutralizing eachother.

Trading at One of the Lowest Valuations• We have valued the company based on PE methodology. The company is trading at one of the lowest valuations | 12.2x of

FY21E EPS. Hero MotoCorp in the past nine years has been trading at an average 15.4x of its forward EPS and by looking atthe short term uncertainty in the automobile industry, given a discount of 10% to assign the earning multiple of 13.9x to itsFY21E EPS of Rs. 214. We have come across the fair value of Hero MotoCorp at Rs. 2,972 per share, maintained our buy rating.We strongly recommend to lap-up the stocks at these levels as uncertainty is the best time and the effective tactics/strategyof the management would yield in better results.







Q4FY19 Result Analysis

Impact on Working Capital Days• Hero’s WC days fell to minus five days in FY19 from minus 24 days in FY18. This was majorly on account of increase in the

receivable days (from 17 days in FY18 to 31 days in FY19) & inventory days (from 14 days in FY18 to 17 days in FY19) and littledecrease in payable days (from 55 days in FY18 to 53 days in FY19). The company is expected to take some more actions toreduce the inventories. At March exit, the inventories are hovering around 45-50 days. The build up of inventories was majorlydue to poor festive season.

Expect Higher Capital Expenditure• The company incurred a capex of Rs. 800 crores in FY19 and expect Rs. 1,500 crores for the next year. This would be mainly for

setting up a plant in Andhra Pradesh, BS6 lines of manufacturing, R&D, annual maintenance capex, etc.

(INR Crores) Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%) FY19 FY18 YoY (%)

Volumes (Nos) 17,81,160 20,01,595 -11.0% 17,98,905 -1.0% 78,20,745 75,87,154 3.1%

Realization (Rs) 44,269 42,786 3.5% 43,720 1.3% 43,027 42,480 1.3%

Net sales 7,885 8,564 -7.9% 7,865 0.3% 33,651 32,230 4.4%

COGS 5,439 5,793 -6.1% 5,415 0.4% 23,318 21,835 6.8%

Employee Expenses 447 381 17.4% 436 2.7% 1,730 1,540 12.3%

Other Expenses 930 1,020 -8.8% 910 2.2% 3,672 3,576 2.7%

EBITDA 1,069 1,371 -22.0% 1,105 -3.2% 4,930 5,280 -6.6%

D&A 150 148 1.3% 152 -1.1% 602 556 8.4%

Other income 164 167 -1.4% 188 -12.5% 691 526 31.5%

EBIT 1,083 1,389 -22.0% 1,141 -5.0% 5,019 5,250 -4.4%

Interest Expense 2 2 42.2% 2 1.4% 9 6 37.6%

PBT 1,081 1,387 -22.1% 1,138 -5.0% 5,011 5,244 -4.5%

Tax 351 420 -16.4% 369 -5.0% 1,626 1,547 5.1%

PAT 730 967 -24.5% 769 -5.0% 3,385 3,697 -8.5%

EPS in INR 37 48 -24.5% 39 -5.1% 169 185 -8.5%

Margin Analysis Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%) FY19 FY18 YoY (%)

Material Expenses % Net Sales 69.0% 67.6% 1.3% 68.8% 0.1% 69.3% 67.7% 1.5%

Gross Margin 31.0% 32.4% -1.3% 31.2% -0.1% 30.7% 32.3% -1.5%

Employee Expenses % Net Sales 5.7% 4.4% 1.2% 5.5% 0.1% 5.1% 4.8% 0.4%

Other Expenses % Net Sales 11.8% 11.9% -0.1% 11.6% 0.2% 10.9% 11.1% -0.2%

EBITDA Margin (%) 13.6% 16.0% -2.4% 14.0% -0.5% 14.7% 16.4% -1.7%

Tax Rate (%) 32.4% 30.3% 2.2% 32.4% 0.0% 32.4% 29.5% 3.0%

PAT Margin (%) 9.3% 11.3% -2.0% 9.8% -0.5% 10.1% 11.5% -1.4%





12% 88% 74% 12%2%

0.0%

0.0%12%

88% 74%12%

1%

0.0%

0.0%

9%91% 79%

10%

1%

0.1%

0.0%10%90% 79%

10%1%

0.1%

0.0%

10% 90% 79% 10% 1%

0.1%

0.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sco

ote

rs

2W

Mo

torc

ycle

s

<1

10c

c

11

0-1

25

cc

12

5-1

50

cc

15

0-2

00

cc

20

0-2

50

cc

Hero's Product Mix (%)

FY17 FY18 FY19 FY20E FY21E




Volume Projections

The street has concerns about the rise in the cost per vehicle post the implementation of BS6, however, we reiterate & expect theGovernment would take some measures to reduce the GST of 28% to 18% by that time, as 2Ws are not a luxury product and isgenerally used for mass mobility & income enabler for rural areas. There is a strong rationale behind reducing the GST, hence, wethink the Government would reduce GST on 2Ws, which will benefit the industry as demand would remain intact. Hence, thevolumes in FY21 would continue to grow in a single digit as ~10% increase in the cost of vehicles will get offset by a 10%reduction in the GST rate.

Hero MotoCorp Volume Assumptions FY17 FY18 FY19 FY20E FY21E

Scooters 8,29,786 9,09,986 7,39,958 7,87,742 8,34,788

YoY Growth (%) 9.7% -18.7% 6.5% 6.0%

2W Motorcycles 58,34,260 66,77,207 70,80,873 74,96,487 79,19,135

YoY Growth (%) 14.4% 6.0% 5.9% 5.6%

<110cc 49,40,274 56,52,159 62,03,782 65,78,188 69,45,285

YoY Growth (%) 14.4% 9.8% 6.0% 5.6%

110-125cc 7,74,640 9,15,400 7,99,767 8,44,229 8,91,586

YoY Growth (%) 18.2% -12.6% 5.6% 5.6%

125-150cc 1,18,315 1,09,376 67,972 73,855 81,968

YoY Growth (%) -7.6% -37.9% 8.7% 11.0%

200-250cc 1,031 272 156 214 296

YoY Growth (%) -73.6% -42.6% 37.2% 38.3%

Total Sales (Scooters + Motorcycles)

66,64,046 75,87,193 78,20,831 82,84,229 87,53,923

YoY Growth (%) 13.9% 3.1% 5.9% 5.7%

Domestic 64,83,655 73,82,718 76,12,775 80,56,234 84,99,057

YoY Growth (%) 13.9% 3.1% 5.8% 5.5%

Exports 1,80,391 2,04,475 2,08,056 2,27,995 2,54,865

YoY Growth (%) 13.4% 1.8% 9.6% 11.8%

Average Realization (Rs) 42,768 42,480 43,027 44,126 46,228

YoY Growth (%) -0.7% 1.3% 2.6% 4.8%








Source: Company, LME, Cogencis, NSPL Research

Story in Charts




50.4

50.7

50.6

50.5 50

.750

.250

.0 50.4

50.3 50

.6 50.9 51

.350

.7 50.9

52.4

52.3

52.1

51.4

51.0 51

.351

.251

.351

.2 51.5

49.4

50.8 51

.2 51.7

51.1

50.8

50.4

50.5

50.5

50.5

50.6

50.7

47.0

48.0

49.0

50.0

51.0

52.0

53.0

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

Dec

-16

Feb

-17

Ap

r-1

7

Jun

-17

Au

g-1

7

Oct

-17

Dec

-17

Feb

-18

Ap

r-1

8

Jun

-18

Au

g-1

8

Oct

-18

Dec

-18

Feb

-19

Sustained Motorcycles Market Share (%)

Motorcycles

17.8

16.3

15.4

15.1

14.9

14.7

14.8

14.7

14.5

14.1

14.1

14.1

10.9 11

.7 12.7

12.5

12.3

12.4

12.6

12.9

13.0

13.0

13.0

13.2

10.6

10.3

10.4

10.0

10.2

10.4

10.7

10.9

10.7

10.6

10.7

10.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

Dec

-16

Feb

-17

Ap

r-1

7

Jun

-17

Au

g-1

7

Oct

-17

Dec

-17

Feb

-18

Ap

r-1

8

Jun

-18

Au

g-1

8

Oct

-18

Dec

-18

Feb

-19

Declining Scooters Market Share (%)

Scooters

18,5

3,64

7

20,2

2,80

5

17,0

9,10

7

20,0

1,59

5

21,0

6,62

9

21,3

4,05

1

17,9

8,90

5

17,8

1,25

0

6.2

% 10

.9%

16

.0% 2

3.4

%

13

.6%

5.5

%

5.3

%

-11

.0%

-15.0%-10.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%

0

5,00,000

10,00,000

15,00,000

20,00,000

25,00,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9Hero's Volume Growth

Volumes (Nos) Volume Growth (%)

43,0

53

41,3

87

42,7

96

42,7

86

41,8

20

42,5

99

43,7

20

44,2

69

1.6%

-3.2%-0.9%

0.3%

-2.9%

2.9%2.2%

3.5%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

39,000

40,000

41,000

42,000

43,000

44,000

45,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Subdued Realization Growth

Realization (Rs) Realization Growth (%)

7,97

2

8,37

2

7,31

4

8,56

4

8,81

0

9,09

1

7,86

5

7,88

5

7.7%

7.4%

14.9

%

23.7

%

10.5

%

8.6%

7.5%

-7.9

%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Hero's Topline Performance

Revenue Revenue Growth (%)

1,29

6

1,45

6

1,15

8

1,37

1

1,37

7

1,37

9

1,10

5

1,06

9

16.3%

17.4%

15.8% 16.0%15.6%

15.2%

14.0%13.6%

13.0%13.5%14.0%14.5%15.0%15.5%16.0%16.5%17.0%17.5%18.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

EBITDA and Margin Performance

EBITDA EBITDA Margin (%)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

0

500

1,000

1,500

2,000

2,500

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

Jul-

18

Sep

-18

No

v-1

8

Jan

-19

Mar

-19

Major RM Prices remain Steady

Steel Price(USD/ton)

Aluminium Price(USD/ton)

Rubber Price(USD/kg)

33.4

%

31.4

%

26.3

%

25.5

%

25.5

%

46.1

%

44.6

%

39.0

%

37.8

%

37.9

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

FY17 FY18 FY19 FY20E FY21E

Return Ratios

ROE ROCE




Profit & Loss (INR Crores) FY17 FY18 FY19 FY20E FY21E

Net sales 28,500 32,230 33,651 36,555 40,467

COGS 19,037 21,835 23,318 25,206 27,791

Employee Expenses 1,396 1,540 1,730 1,906 2,080

Other Expenses 3,432 3,576 3,673 3,923 4,263

EBITDA 4,635 5,280 4,930 5,520 6,334

D&A 493 556 602 712 785

Other income 522 526 691 737 803

EBIT 4,665 5,250 5,019 5,544 6,352

Interest Expense 6 6 9 9 9

PBT 4,658 5,244 5,011 5,535 6,342

Tax -1,281 -1,547 -1,630 -1,800 -2,063

PAT 3,377 3,697 3,381 3,735 4,280

EPS in INR 169 185 169 187 214

Balance Sheet (INR Crores) FY17 FY18 FY19 FY20E FY21E

ASSETS

Non-Current Assets

(a) Property, plant and equipment 4,311 4,486 4,478 5,403 5,770

(b) Capital work-in-progress 271 204 361 361 385

(c) Intangible assets 85 169 141 358 480

(d) Intangible assets under development 194 115 181 0 0

(e) Financial assets 1,397 1,980 2,861 3,108 3,441

(f ) Income tax assets (net) 332 379 839 927 1,062

(g) Other non-current assets 651 559 664 722 799

Total Non-Current Assets 7,241 7,891 9,526 10,879 11,938

Current Assets

(a) Inventories 656 824 1,072 967 1,066

(b) Financial assets

(i) Investments 4,541 5,591 3,167 3,440 3,809

(ii) Trade receivables 1,562 1,520 2,822 1,703 1,885

(iii) Cash and cash equivalents 15 34 41 1,799 2,430

(iv) Bank balances other than (iii) above 121 107 96 247 462

(v) Loans 24 28 25 27 30

(vi) Others 145 539 654 710 786

(c) Other current assets 388 205 239 260 288

Total Current Assets 7,453 8,848 8,116 9,154 10,755

Total Assets 14,694 16,739 17,641 20,033 22,692

EQUITY AND LIABILITIES

Equity

(a) Equity Share capital 40 40 40 40 40

(b) Other equity 10,071 11,729 12,817 14,633 16,712

Total Equity 10,111 11,769 12,857 14,673 16,752

LIABILITIES

Non-current liabilities

(a) Provisions 75 115 117 127 141

(b) Deferred tax liabilities (net) 414 512 537 593 679

Total Non - Current Liabilities 490 627 654 720 820

Current liabilities

(a) Financial liabilities

(i) Trade payables 3,247 3,319 3,355 3,798 4,188

(ii) Other financial liabilities 353 202 221 240 266

(b) Other current liabilities 454 763 495 538 595

(c) Provisions 39 60 59 64 71

Total Current Liabilities 4,093 4,343 4,130 4,640 5,120

Total Equity and Liabilities 14,694 16,739 17,641 20,033 22,692








Cash Flow (INR Crores) FY17 FY18 FY19 FY20E FY21E

Profit After Tax 3,377 3,697 3,381 3,735 4,280

Operating Profit before Working Capital Changes 4,815 5,315 4,936 5,525 6,339

Cash Generated from Operations 5,215 5,475 2,474 7,096 6,312

Less: income tax paid 1,186 1,494 1,630 1,800 2,063

Cash Flow from Operating 4,028 3,981 844 5,296 4,249

(Incr)/ Decr in Gross PP&E -1,151 -802 -789 -1,673 -1,299

Cash Flow from Investing -1,944 -1,915 909 -1,609 -1,409

Dividends Paid (including tax on dividend) -2,091 -2,043 -1,738 -1,920 -2,200

Finance costs -6 -6 -9 -9 -9

Cash Flow from Financing -2,096 -2,047 -1,746 -1,929 -2,209

Incr/(Decr) in Balance Sheet Cash -12 19 7 1,758 631

Cash at the Start of the Year 27 15 34 41 1,799

Cash at the End of the Year 15 34 41 1,799 2,430

RATIOS FY17 FY18 FY19 FY20E FY21E

Growth (%)

Net Revenues 0.2% 13.1% 4.4% 8.6% 10.7%

EBITDA 4.0% 13.9% -6.6% 12.0% 14.7%

PAT 6.9% 9.5% -8.6% 10.5% 14.6%

Profitability

Return on Capital (%) 46.1% 44.6% 39.0% 37.8% 37.9%

Return on Equity (%) 33.4% 31.4% 26.3% 25.5% 25.5%

Margin Trend

EBITDA Margin (%) 16.3% 16.4% 14.7% 15.1% 15.7%

Net profit Margin (%) 11.8% 11.5% 10.0% 10.2% 10.6%

Solvency

Total Debt / Equity 0.0 0.0 0.0 0.0 0.0

Valuation Ratios

P/E 17.7 19.0 15.4 13.9 12.2

EV/EBITDA 12.9 13.3 10.5 9.1 7.8

P/B 5.9 6.0 4.0 3.5 3.1







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Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter;

Disclosure of Interest Statement

Details of Nalanda Securities Pvt. Limited (NSPL)

• NSPL is a Stock Broker registered with BSE, NSE and MCX ‐ SX in all the major

segments viz. Cash, F & O and CDS segments. Further, NSPL is a Registered

Portfolio Manager and is registered with SEBI

• SEBI Registration Number: INH000004617

Details of Disciplinary History of NSPL No disciplinary action is / was running / initiated against NSPL

Research analyst or NSPL or its relatives'/associates' financial interest in

the subject company and nature of such financial interest

No (except to the extent of shares held by Research analyst or NSPL or its

relatives'/associates')

Whether Research analyst or NSPL or its relatives'/associates' is holding

the securities of the subject companyNO

Research analyst or NSPL or its relatives'/associates' actual/beneficial

ownership of 1% or more in securities of the subject company, at the

end of the month immediately preceding the date of publication of the

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NO

Research analyst or NSPL or its relatives'/associates' any other material

conflict of interest at the time of publication of the documentNO

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for products or services other than investment banking or merchant

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Rating Legend

Strong Buy More than 15%

Buy 5% - 15%

Hold 0 – 5%

Reduce -5% - 0

Sell Less than -5%

Hero MotoCorp

Date CMP (INR) Target Price (INR) Recommendation

April 27, 2019 2,604 2,972 Buy

February 01, 2019 2,612 3,071 Strong Buy

October 17, 2018 2,899 3,036 Hold







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