Hold Hero MotoCorp Ltd - Result Update - Emkay

Reco: HOLD Hero MotoCorp Ltd
CMP: Rs 1,951
Target Price: Rs 2,170

Limited Upside, Downgrade to HOLD

Results below est. with EBIDTA at Rs 9.4bn (est of Rs 9.8bn) and APAT of Rs 6.1bn (est. of Rs 6.3bn). Tax rate at 15.3% was lower than our est. of 16.7%

Expects >10% volume growth in FY13 for industry with rural demand outpacing urban demand. Retail sales in January 2012 have been encouraging
Fine tune our estimates for FY12, lower FY13 EPS by ~3.5% to Rs 140.1. Key upside arise from favorable currency as imports accounts for ~15% of RM (direct +indirect)

Downgrade rating to HOLD, revise TP to Rs 2,170 (FY13 PER 15.5x). Continue to have concerns with concentrated product portfolio and lack of clarity on R&D.

Source : Equity Bulls

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