Hero Moto Shares End Little Changed After Rallying Most In Three Months
Shares of Hero MotoCorp Ltd. ended little changed after gaining the most in three months, riding on the optimism stemming from a pickup in retail sales during the festival season.
The nation's largest two-wheeler maker managed to sell more than 14 lakh units of motorcycles and scooters in retail sales during the recently concluded festive season, according to an exchange filing.
"Sales during the 32-day festival period, spread between the first day of Navratra and the concluding day after Bhai Duj, were 98% of the festive season volumes last year, and 103% of the same period in 2018," it said.
The company’s festival season retails were driven by the strong performance of its popular models across segments, including the 100cc Splendor+ and HF Deluxe, 125cc motorcycles Glamour and Super Splendor and the Xtreme 160R and the XPulse range in the premium segment. The Glamour in its BS-VI version continues to gain volumes in new markets, the filing said.
The festive season also witnessed strong customer preference for Destini and Pleasure scooters, resulting in high double-digit growth for the two models, it said.
Besides, the robust festive sale brought stocks at dealerships to less than four weeks, the lowest ever post-festive inventory.
Hero MotoCorp’s market share, too, has grown by more than 500 basis points in October.Hero MotoCorp Statement
Recovery during the festive season is crucial for automakers as they were battling a prolonged slowdown even before the pandemic. The lockdown stalled production and led to a washout in the initial months. Sales gradually recovered from July, mostly led by first-time buyers as people opted for personal mobility over public transport amid fears of contracting the infection.
Shares of Hero MotoCorp ended 0.2% higher at Rs 2,988, after gaining as much as 5.1%—the most in a single day since August—to Rs 3,136.7 apiece. The stock snapped its three-day losing streak. Of the 51 analysts tracking Hero MotoCorp, 30 have a 'buy' rating, 13 suggest a 'hold' and the rest recommend a 'sell'. The average of Bloomberg consensus 12-month target price implies an upside of 3.5%.