Hero MotoCorp Ltd. Strong show, Upgrade to Accumulate :Emkay,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Hero MotoCorp Ltd.

Strong show, Upgrade to Accumulate

ACCUMULATE

CMP: Rs 1,985                                       Target Price: Rs 2,250

---

n     Results above est. with EBIDTA at 7.1bn (est of Rs 6.8bn) and APAT of Rs 6bn (est. of Rs 5.7bn).  Surprised by high treasury income despite a 25% drop in treasury book

n     Demand outlook remains robust. Revise our FY12/13 EPS est. upwards by 5%/5% to 123/145 due to higher volumes. Upgrade FY12/FY13 by volumes by 2% to 6.35mn/7.1mn units

n     Factoring in full capacity utilization for 2HFY12 (~13% volume growth in 2H). Capacity ramp up can result in further volume upgrades for FY12

n     Upgrade rating to ACCUMULATE and revise our TP to Rs2,250 (FY13 PER 15.5x). Continue to have concerns with concentrated product portfolio/ lack of clarity on R&D