Hero MotoCorp stock jumps over 3% to hit new record high, crosses ₹5000 mark – here’s why
Hero MotoCorp shares hit a new high of ₹5,045 apiece, gaining 3.2%. The company joins ONDC to enhance digital reach for customers.
Continuing their triumphant run for the fifth straight session, shares of Hero MotoCorp, the world’s largest manufacturer of motorcycles and scooters, crossed the ₹5,000 mark in today's trade to hit a new all-time high of ₹5,045 apiece by gaining 3.2%.
The stock's surge today has propelled it to achieve a 93% gain over the past year and 105% increase over the past two years. Starting from its low of ₹2,146 per share in March 2022, the stock is currently trading at a remarkable 134% increase.
It took seven months for the stock to climb from ₹3,000 to ₹4,000, and only five months to surpass the ₹5,000 level.
The company on Monday said that it has joined the Open Network for Digital Commerce (ONDC) to enhance reach and convenience and provide an easily accessible digital mode to customers. Hero MotoCorp already has the largest physical distribution and service network in the Indian auto industry. Partnering with ONDC will further enhance the reach and convenience, providing an easily accessible digital mode to customers.
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"The Open Network will initially offer two-wheeler parts, accessories, and merchandise. Customers can easily discover Hero Genuine Parts by using any buyer apps on the network, such as Paytm and Mystore, among others, " the company said in its regulatory filing.
The company further said that by improving reach and creating a fair and efficient environment for Hero MotoCorp’s channel partners, this integration speeds up order processing by enabling hyperlocal deliveries backed by Hero MotoCorp’s extensive physical distribution.
As Hero MotoCorp onboards the network, it further strengthens the Digital India mission, helping drive the country's digital transformation and economic growth while revolutionising the digital automotive marketplace.
Strong show
The stock saw a positive turn on May 8th, breaking a four-day downward trend, following the company's strong performance for the quarter ending in March and for the full fiscal year (FY24). This led brokerage firms to revise their target price upward for the stock.
In FY24, two-wheelers improved sharply, mirroring the overall economic growth, and there was also a notable improvement in export volumes. Analysts anticipate this positive momentum to persist into FY25.
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The Society of Indian Automobile Manufacturers released its monthly performance report for April 2024, which showed a significant surge in two-wheeler sales. Sales soared by 30.8 percent compared to the previous year, reaching 17,51,393 units, up from 13,38,588 units.
Hero MotoCorp sold 5.33 lakh units in April, marking a 34.7% increase compared to April 2023, when they sold 3.96 lakh units. Moreover, this April's sales showed a 9% uptick from the previous month's sales of 490,415 units in March 2024.
The Xtreme 125R model is currently gaining significant traction nationwide, prompting Hero MotoCorp to swiftly increase supplies to meet demand. Nomura, a Japanese brokerage firm, reported positive feedback from an industry survey on the Xtreme 125R, indicating promising growth prospects.
Furthermore, Hero MotoCorp is observing favorable consumer sentiment in both rural and urban markets across India, according to the brokerage. Consequently, Nomura upgraded its rating on Hero MotoCorp's stock from ‘neutral’ to ‘buy’, while also raising the target price to ₹5,448.00 from ₹5,356.00.
The company plans to introduce multiple new products in the 200-400cc category, aiming to enhance its market presence in the premium segment. The company has commenced deliveries of its flagship product, the Mavrick 440, nationwide.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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