Shares of the company rose nearly 3% to Rs 2,880 on the National Stock Exchange (NSE). Earlier in the day, the stock touched an 8-month high of Rs 2,912.65. The gains were backed by strong volumes of over 1 million shares, way higher than the 6-month average trading volume of over 400,000 shares.
The country’s largest two-wheeler maker saw its total sales increase nearly 7% on year in May to 5,19,474 units, led by an over 8% growth in motorcycle sales to 4,89,336 units.
While the company reported a growth in sales in the domestic market, it struggled to sell vehicles in international markets.
According to ICICIdirect, Hero MotoCorp has led the volume recovery in the two-wheeler pack, as volumes surged 31% month-on-month. Motorcycle volumes increased 33% month-on-month.
However, the overall growth in volumes reported by the company was largely in line with analysts’ expectations.
Despite better numbers, the stock is the least preferred in the pack. The stock has underperformed its peers, Bajaj Auto and TVS Motor by a wide margin.While both TVS Motor Co and Bajaj Auto have gained over 20% each so far in 2023, Hero MotoCorp has gained just 5%.
“Within the 2W space, we like Bajaj Auto as we expect a bounce back of exports 3-4 months down the line as the scenario may improve in Africa. Also, the EV strength gained
from Chetak and the upcoming launch of e-3W can be additional positives,” Ashwin Patil of LKP Securities said in his report.
For Nomura Financial Advisory and Securities too, Bajaj Auto is the preferred stock in the two-wheeler space.
Most analysts believe that the recovery in volumes for the two-wheeler industry will happen steadily in FY24.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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