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INVESTMENT INSIGHTS

Check Before You Invest : Hero MotoCorp Ltd

BSE: 500182 NSE: HEROMOTOCO ISIN: INE158A01026
  |   Sector:  Automobiles   |   Industry:  Automobile Two & Three Wheelers

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 quality company, based on a 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 7.2% , indicating faster growth.
Q.2 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.3 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.4 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 Historic Median
Gross Profit Margin 16.2 14.3
Operating Profit Margin 13.87 12.78
Net Profit Margin 11.31 9.62
Q.5 Return on Asset of Hero MotoCorp Ltd?
Hero MotoCorp Ltd Return on Asset is 16.41(x), which is above its 5 year historical median of 13.82(x), indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Hero MotoCorp Ltd?
Hero MotoCorp Ltd Return on equity is 24.45% for FY-2025 , which is above its historical median of 20.23%, indicating the business is making better use of its shareholders capital.
Q.7 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 estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Hero MotoCorp Ltd?
Hero MotoCorp Ltd Cash conversion cycle is -20 , below its historical median of -20 , indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.48 1.48
ROE 24.45 20.23
ROCE 32.53 26.74
Cash Conversion Cycle -20 -20
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 0.14 , 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, indicating the business is able to service its debt comfortably.

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 14.21% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 40,756.4 31,416.7
Gross Profit 6,602.5 5,766.1
Operating Profit 5,649 4,946.5
Net Profit 4,610 4,540
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.48 1.53
ROE 24.45 24.31
ROCE 32.53 27.94
Cash Conversion Cycle -19.76 -19

Valuation & price assessment

Q.1 Stock return of Hero MotoCorp Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 5.2% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 5.2% 12.9% 28.9% 43.1%
Q.3 Valuation ratios of Hero MotoCorp Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 22.11 12.54 30.61
Price to Book 4.89 4.38 3.72
Price to Sales 2.49 2.62 3.29
EV to EBITDA 14.58 0.00 19.81

Check more companies

1. Bajaj Auto
2. Eicher Motors
3. TVS Motor
4. Hero MotoCorp
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