Hero MotoCorp Q4 Review - Healthy Dividend Yield, Low Valuation To Limit Downside: Dolat Capital
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Dolat Capital Report
Hero MotoCorp Ltd. Q4 FY21 Ebitda number beat estimates led by better product mix (higher share of Splendor and export), cost saving program (LEAP), price hike and higher spare parts revenue.
Ebitda per vehicle increased by 1% QoQ to Rs 7,700/vehicle.
We expect Q1 FY22 sales to be dampened as lockdowns across India has disrupted wedding season due to the surge in Covid-19 cases.
Resultantly, the company’s inventory is at elevated levels currently (seven to eight weeks).
Management believes recovery will be sharp from Q2, post vaccination drive.
Rural demand continues to be strong, on expectations of a normal monsoon and better Rabi harvesting.
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