Hero Honda – Continues to under perform
Expect growth to remain muted; dispatches hit by floods.
Company lagging its own sales target for the last two months.
Mix expected to remain weak with lower contribution from Splendor-Passion.
Expect premium segment (Hunk, Xtreme and Karizma) to remain subdued.
Stock trading at 15.2x FY12E EPS with a 4.6% EPS CAGR. Looks very expensive
considering uncertainty around the JV. Maintain SELL with a target price of
`1,588 (14% downside).
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