We maintain our positive stance on the stock as the company continues to stand strong amidst the competitive pressures, especially from Honda, alongside strong branding campaign coupled with a slew of new launches. We believe that the two-wheeler industry is set to rebound and foresee industry volume growth at 13% and 14% in FY15E and FY16E, respectively. We estimate Hero to maintain a relatively stable market share with a volume growth of 11% over FY14-17E. Trading at 14.8x our FY16E earnings, the stock does not capture in a robust 28% earnings growth between FY14-16E. We remain positive on the stock with a Target Price of Rs2,850. arget Price of Rs2,850.- Reliance Securities
Posted on: Mon, 01 Sep 2014 08:35:06 +0000
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