Here’s what made Hero Moto share price jump 5% in the last month

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Why is Hero Moto share price rising?

Two wheeler giant Hero Moto has been having a decent run in the stock markets. This can be gauged from the fact that the Hero Moto share price has rallied more than 5% in the last month.

So, what are the reasons behind this rally? Is it due to the renewed optimism around the automobile industry that has aided the growth in the Hero Moto share price? Or has the two wheeler major witnessed some developments specific to it that has led to this rise? Let’s try and decode!

Hero Moto share price: Reasons for rally

Results above expectations: A major reason for the rise in Hero Moto stock can be attributed to its robust results for the March quarter.

In the Jan - Mar ‘23 period, the two wheeler major posted a 37% yearly rise in net profits to Rs 859 crores. Further, revenues grew by 12% from the previous year to Rs 8,307 crores.

Moreover, the company declared a dividend of Rs 35 per share which further attracted investors to the Hero Moto stock and aided the rally.

New product launches: Another contributory factor to the rally in the Hero Moto share price is due to the slew of launches by Hero Moto in recent times.

From launching its first electric two wheeler (Vida V1) in the December quarter to its latest launch of Hero Extreme 4V, the legacy player is not just resting on its laurels and huge market share to make its presence felt.

And the company is not looking to rest easy with the CFO revealing that Hero Moto will launch at least one new product every quarter. Moreover, it has also forged a partnership with American motorcycle major Harley Davidson to develop premium models for the Indian market, an answer to Bajaj's partnership with Triumph Motorcycles.

Improving margins and gradual revival in rural demand: Hero Moto recently hiked prices of its vehicles in April. Coupled with a gradual increase in rural demand, which remains its core market, and the easing of the global chip shortage scenario, the prospects of margin improvement seem to appear clearer.

Consequently, this has attracted investors to the stock who are willing to take this ride leading to the rally in the Hero Moto share price.

Hero Moto: Analyst target price

Citi: The renowned global brokerage has a “Buy” rating on the stock with a price target of Rs 3,650. The firm has cited heightened demand prospects and positive management outlooks as key drivers of the share price growth.

JP Morgan: The top global brokerage has a “Buy” rating on the stock with a price target of Rs 3,050. Strong operational results and volume growth have been cited as major drivers of the Hero Moto share price growth in the near term by the firm.

Prabhudas Lilladher: The renowned domestic brokerage has a “Buy” rating on the stock with a price target of Rs 3,200.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.

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