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Last Updated on: 27 February, 2024|Author: Getaka | Social: X Twitter Profile
Stock Ticker - BSE: 500182 | NSE: HEROMOTOCO

Fundamental Analysis of Hero MotoCorp Ltd

About the Company - Hero MotoCorp Ltd

Hero MotoCorp Ltd. is a Public Limited Listed company incorporated on 19/01/1984 and has its registered office in the State of Delhi, India. Company’s Corporate Identification Number(CIN) is L35911DL1984PLC017354 and registration number is 017354. Currently Company is involved in the business activities of Manufacture of motorcycles, scooters, mopeds etc. and their engine. Company’s Total Operating Revenue is Rs. 29245.47 Cr. and Equity Capital is Rs. 39.96 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Auto - 2 & 3 WheelersThe Grand Plaza, Plot No. 2, New Delhi Delhi 110070customercare@heromotocorp.com
http://www.heromotocorp.com
Management
NamePosition Held
Dr. Pawan MunjalExe.Chairman & W T D
Mr. Vikram S KasbekarWhole Time Director
Ms. Vasudha DinodiaNon Executive Director
Mr. Suman Kant MunjalNon Executive Director
Mr. Pradeep DinodiaNon Executive Director
Ms. Tina TrikhaInd. Non-Executive Director
Ms. Camille TangInd. Non-Executive Director
Air M'shal (Retd.) B S DhanoaInd. Non-Executive Director
Mr. Rajnish KumarInd. Non-Executive Director
Prof. Jagmohan Singh RajuInd. Non-Executive Director

Hero MotoCorp Ltd. Share Price Update

Share PriceValue
Today₹4,908.50
Previous Day₹4,809.95

Basic Stock Data of Hero MotoCorp Ltd

Market Cap 88,367 Cr.
Current Price 4,420
High / Low4,980/2,246
Stock P/E23.8
Book Value 884
Dividend Yield2.22 %
ROCE22.7 %
ROE16.7 %
Face Value 2.00

Data Source: screener.in

Competitors of Hero MotoCorp Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Atul Auto Ltd 1,555 Cr. 560693/306263 1450.00 %4.43 %0.94 % 5.00
Bajaj Auto Ltd 2,39,375 Cr. 8,4538,650/3,62632.3 1,0361.66 %26.2 %20.2 % 10.0
TVS Motor Company Ltd 1,00,529 Cr. 2,1162,186/1,00561.5 1330.24 %13.2 %25.6 % 1.00
Industry Average113,819.67 Cr3,709.67118.93438.000.63%14.61%15.58%5.33

Hero MotoCorp Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales9,8278,6905,5038,5398,0137,4978,4489,1588,1188,4348,8519,5339,788
Expenses8,4787,4635,1197,5167,0306,6617,5278,0967,1777,3457,7348,1748,403
Operating Profit1,3491,2273841,0239838369201,0629421,0891,1171,3601,385
OPM %14%14%7%12%12%11%11%12%12%13%13%14%14%
Other Income206106145158140131569426523866213288
Interest11131314131314482419212523
Depreciation180174173174174168173173172180180187194
Profit before tax1,3641,1473439939367867899361,0111,1289821,3601,456
Tax %25%23%25%25%25%21%26%27%29%28%29%26%25%
Net Profit1,0298852567487046215866827218117011,0071,091
EPS in Rs51.0244.1012.8237.3235.2230.6029.5534.4536.3340.2935.5350.3554.70

Hero MotoCorp Ltd Quarterly Chart

Hero MotoCorp Ltd Profit & Loss

MonthMar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales25,27527,53828,45728,61032,45833,97129,25430,95929,55134,15834,937
Expenses21,72224,01824,03324,02527,12428,94625,18426,90226,29530,06030,429
Operating Profit3,5533,5204,4244,5855,3345,0254,0704,0583,2564,0994,508
OPM %14%13%16%16%16%15%14%13%11%12%13%
Other Income4303254218305647411,434553545567781
Interest12121527313747465310589
Depreciation1,107540443502575624846715690697719
Profit before tax2,8643,2924,3874,8855,2925,1044,6113,8493,0583,8644,481
Tax %26%29%29%27%30%32%21%24%24%28%
Net Profit2,1022,3643,1123,5463,7223,4663,6592,9362,3292,8003,240
EPS in Rs105.30118.42157.34179.49186.29172.44182.14146.05115.95140.61162.50
Dividend Payout %62%51%46%47%51%50%49%72%82%71%

Hero MotoCorp Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)12.46%31.64%13.95%4.96%-6.88%5.57%-19.76%-20.67%20.22%
Change in YoY Net Profit Growth (%)0.00%19.18%-17.70%-8.98%-11.84%12.45%-25.33%-0.91%40.90%

Hero MotoCorp Ltd Growth

Compounded Sales Growth
10 Years:%
5 Years:1%
3 Years:5%
TTM:10%
Compounded Profit Growth
10 Years:%
5 Years:-5%
3 Years:-4%
TTM:43%
Stock Price CAGR
10 Years:9%
5 Years:11%
3 Years:10%
1 Year:80%
Return on Equity
10 Years:%
5 Years:19%
3 Years:17%
Last Year:17%

Hero MotoCorp Ltd Balance Sheet

MonthMar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital4040404040404040404040
Reserves5,5836,5008,79410,27611,93213,08014,36615,37615,80716,61617,634
Borrowings284100232261228312453584605568651
Other Liabilities4,2154,0143,8294,7365,1975,0724,8157,0966,0276,6947,986
Total Liabilities10,12210,65412,89615,31217,39718,50419,67423,09622,47823,91726,311
Fixed Assets2,2472,9523,7844,5994,9614,9526,4736,3806,1946,1596,414
CWIP855719653581355573391495517454175
Investments4,1063,1184,5016,0667,6696,1148,35910,58210,52810,89111,218
Other Assets2,9143,8643,9584,0664,4116,8654,4515,6395,2406,4138,505
Total Assets10,12210,65412,89615,31217,39718,50419,67423,09622,47823,91726,311

Hero MotoCorp Ltd Reserves and Borrowings Chart

Hero MotoCorp Ltd Cash Flow

MonthMar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 2,9632,1863,7224,0074,0171,0325,5184,1102,1042,614
Cash from Investing Activity -1,61631-2,300-1,972-1,8581,298-2,819-2,289-222-421
Cash from Financing Activity -1,414-2,131-1,475-2,036-2,102-2,252-2,602-1,852-1,975-2,147
Net Cash Flow-6686-53-1577897-31-9445

Hero MotoCorp Ltd Financial Efficiency Indicators

MonthMar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days13181620162919272729
Inventory Days13161414161924302627
Days Payable46505162565458887673
Cash Conversion Cycle-19-16-20-29-24-5-15-32-23-17
Working Capital Days-33-14-11-17-148-7-17-9-4
ROCE %50%54%48%45%39%27%24%18%23%

Hero MotoCorp Ltd Financial Efficiency Indicators Chart

Hero MotoCorp Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters34.76%34.76%34.76%34.75%34.75%34.78%34.78%34.78%34.78%34.78%34.76%34.76%
FIIs37.19%34.97%32.28%29.57%29.22%28.84%27.79%27.48%27.01%28.10%26.80%28.34%
DIIs18.68%20.23%21.97%23.69%24.24%25.58%26.89%27.30%27.86%27.28%29.14%28.09%
Public9.37%10.05%11.00%11.99%11.79%10.81%10.55%10.45%10.36%9.85%9.30%8.80%
No. of Shareholders2,10,8272,87,5483,43,8983,98,5384,04,0563,68,7213,49,5223,27,7733,33,0543,13,1043,01,4982,80,547

Hero MotoCorp Ltd Shareholding Pattern Chart

No. of Hero MotoCorp Ltd Shareholders

Hero MotoCorp Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
SBI Nifty 50 ETF24110850.48744.63
ICICI Prudential Bluechip Fund21386591.6660.49
Kotak Flexicap Fund - Regular Plan13250001.04409.21
ICICI Prudential Value Discovery Fund12531021.19387
SBI Blue Chip Fund10000000.8308.84
Tata Equity P/E Fund - Regular Plan9078554.69280.38
Tata Equity P/E Fund - Regular Plan - Trigger Option A 5%9078554.69280.38
Nippon India Focused Equity Fund7712243.45238.18
Kotak Equity Opportunities Fund - Regular Plan7500001.52231.63
DSP Mid Cap Fund7107301.52219.5

Hero MotoCorp Ltd ROCE Trend

Hero MotoCorp Ltd EPS Trend

Hero MotoCorp Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)140.62115.96146.07182.15172.45
Diluted EPS (Rs.)140.62115.93146.04182.15172.44
Cash EPS (Rs.)174.84161.04185.07223.81201.75
Book Value[Excl.RevalReserv]/Share (Rs.)839.66800.54778.76728.25662.65
Book Value[Incl.RevalReserv]/Share (Rs.)839.66800.54778.76728.25662.65
Revenue From Operations / Share (Rs.)1709.201479.041549.511464.531700.67
PBDIT / Share (Rs.)233.31200.19233.10239.87285.62
PBIT / Share (Rs.)198.42165.68197.31197.53254.35
PBT / Share (Rs.)193.17163.02194.99229.11252.49
Net Profit / Share (Rs.)139.94126.53149.28181.47170.49
NP After MI And SOA / Share (Rs.)140.60115.96146.03182.13172.42
PBDIT Margin (%)13.6513.5315.0416.3716.79
PBIT Margin (%)11.6011.2012.7313.4814.95
PBT Margin (%)11.3011.0212.5815.6414.84
Net Profit Margin (%)8.188.559.6312.3910.02
NP After MI And SOA Margin (%)8.227.849.4212.4310.13
Return on Networth / Equity (%)16.8714.6218.9225.2526.24
Return on Capital Employeed (%)22.1419.5123.7625.6236.04
Return On Assets (%)11.7410.3012.6318.4918.61
Long Term Debt / Equity (X)0.000.000.000.000.01
Total Debt / Equity (X)0.010.020.020.010.02
Asset Turnover Ratio (%)1.481.311.471.551.92
Current Ratio (X)1.571.921.752.021.91
Quick Ratio (X)1.281.651.471.721.62
Inventory Turnover Ratio (X)16.5314.2215.9016.9722.94
Dividend Payout Ratio (NP) (%)71.1181.9265.0453.2555.09
Dividend Payout Ratio (CP) (%)56.9763.1352.2343.2046.63
Earning Retention Ratio (%)28.8918.0834.9646.7544.91
Cash Earning Retention Ratio (%)43.0336.8747.7756.8053.37
Interest Coverage Ratio (X)44.4675.33100.35102.73153.45
Interest Coverage Ratio (Post Tax) (X)27.6748.6165.2764.1992.60
Enterprise Value (Cr.)46923.2946091.8558321.9931759.2451161.85
EV / Net Operating Revenue (X)1.371.561.881.091.51
EV / EBITDA (X)10.0611.5212.526.638.97
MarketCap / Net Operating Revenue (X)1.371.551.881.091.50
Retention Ratios (%)28.8818.0734.9546.7444.90
Price / BV (X)2.822.903.782.213.89
Price / Net Operating Revenue (X)1.371.551.881.091.50
EarningsYield0.050.050.050.110.06

Hero MotoCorp Ltd Profitability Ratios (%)

Hero MotoCorp Ltd Liquidity Ratios

Hero MotoCorp Ltd Liquidity Ratios (%)

Hero MotoCorp Ltd Interest Coverage Ratios (X)

Hero MotoCorp Ltd Valuation Ratios

Fair Value / Intrinsic Value of Hero MotoCorp Ltd

Fair Value: ₹3591.55

The stock is overvalued by 18.74% compared to the current price ₹4420

*Investments are subject to market risks

Strength and Weakness of Hero MotoCorp Ltd

StrengthWeakness
  1. The stock has a high average ROCE of 32.80%, which is a positive sign.
  2. The stock has a low average Working Capital Days of -11.80, which is a positive sign.
  3. The stock has a low average Cash Conversion Cycle of -20.00, which is a positive sign.
  4. The company has higher reserves (12,360.36 cr) compared to borrowings (388.91 cr), indicating strong financial stability.
  5. The company has shown consistent growth in sales (30.09 cr) and profit (3.64 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 202.66 and average Dividend Yield of 12.79%.

Should I Buy Hero MotoCorp Ltd Share Now?

  • Based on the analysis of various financial indicators, it may be worth considering investment in Hero MotoCorp Ltd:
    1. Net Profit Margin: 8.18% (Higher values are generally favorable)
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 22.14% (Industry Average ROCE: 14.61%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. Interest Coverage Ratio (Post Tax): 27.67 (Higher values, preferably > 2, are recommended)
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    4. Quick Ratio: 1.28 (Higher values, preferably > 1, are recommended)
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    5. ✓ Stock P/E: 26.3 (Industry average Stock P/E: 119)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    6. ✓ Total Debt / Equity: 0.01 (Lower values, preferably < 1, are preferred)
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    While these metrics suggest potential opportunity, it's essential to conduct thorough research or seek advice from financial experts before making any investment decisions.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Hero MotoCorp Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE