Check Before You Invest : Hero MotoCorp Ltd

Snapshot

Q.1 Which industry/sub-sector does Hero MotoCorp Ltd belong to?

Hero MotoCorp Ltd belongs to the Automobiles sector, operating specifically within the Automobile Two & Three Wheelers segment.

Q.2 Is Hero MotoCorp Ltd a good quality company?

Hero MotoCorp Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Hero MotoCorp Ltd undervalued or overvalued?

Hero MotoCorp Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Hero MotoCorp Ltd a good buy now?

Hero MotoCorp Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Hero MotoCorp Ltd?

Hero MotoCorp Ltd revenue growth is 8.8% for FY-2025, which is above its 5-year CAGR of 7.16%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Return on capital employed is 32.53% for FY-2025, which is above its 5-year historical median of 26.74%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Return on Asset is 16.41%, which is above its 5-year historical median of 13.82%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Return on equity is 24.45% for FY-2025, which is above its 5-year historical median of 20.23%, indicating the business is making better use of its shareholders capital.

Q.5 Cash conversion cycle of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Cash conversion cycle is -20 days, in line with its 5-year historical median of -20 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	1.48	1.48
ROE	24.45	20.23
ROCE	32.53	26.74
Cash Conversion Cycle	-20 days	-20 days

Q.6 Gross Profit margin of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Gross profit margin which is the profit after deduction of direct costs, is 16.2% for FY-2025, which is above its 5-year median of 14.3%, indicating increasing margins.

Q.7 Operating Profit Margin of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.87% for FY-2025, which is above its 5-year median of 12.78% indicating increasing margins.

Q.8 Net Profit Margin of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Net Profit Margin is 11.31% for FY-2025, is above with its 5-year median of 9.62%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	16.2	14.3
Operating Profit Margin	13.87	12.78
Net Profit Margin	11.31	9.62

Q.9 Debt to Equity ratio of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.17, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Hero MotoCorp Ltd?

Hero MotoCorp Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Hero MotoCorp Ltd?

Promoters hold 34.73% of the Hero MotoCorp Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Hero MotoCorp Ltd vs industry peers?

Hero MotoCorp Ltd revenue CAGR is 7.16%, compared to the industry median CAGR of 13.41%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	8.8	13.4
Gross Profit Growth	12.6	14.5
Operating Profit Growth	10.8	16.1
Net Profit Growth	16.2	14

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.48	1.27
ROE	24.45	21.4
ROCE	32.53	27.11
Cash Conversion Cycle (days)	-19.76	-20

Valuation & price assessment

Q.1 Stock return of Hero MotoCorp Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 5.8% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	5.8%	12.9%	26.6%	36.5%

Q.3 Valuation ratios of Hero MotoCorp Ltd vs historical?

The current P/E is similar that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	20.63	20.22	22.22
Price to Book	4.56	3.73	4.64
Price to Sales	2.32	1.89	3.29
EV to EBITDA	13.6	12.93	16.38

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