Why Hero MotoCorp Share Price is Rising

I had to confirm what I saw on my screen by looking closer...

• "Harley Davidson launches a bike worth Rs 229,000 in India".

I then checked once again to make sure I wasn't leaving out any zeros while reading the price of the 2-wheeler. But indeed, the news was true.

The most affordable Harley-Davidson X440 motorcycle has finally entered the Indian market yesterday. The design of the much-anticipated bike was revealed earlier in May this year.

It's the most affordable, entry-level motorcycle from Harley-Davidson. It is jointly developed by Harley-Davidson and Hero MotoCorp. The latter manufactures it locally in India.

Ever since the launch of design, Hero MotoCorp's share price has been on the rise. It has gained 20% in the last two months.

Even before the launch of the Harley Davidson bike, Hero MotoCorp's share price was on the rise.

In this article, we will talk about why Hero MotoCorp share price is rising and what next for the 2-wheeler company.

#1 Price hike

Last week on Friday, 30 June 2023, Hero MotoCorp announced that it will hike the prices of its motorcycles and scooters by around 1.5% from 3 July 2023.

The company cited several factors, including a rise in input costs. It said that the exact quantum of its latest increase would vary by specific models and markets.

Earlier in April too, the company had raised prices by around 2%.

Price hike often works out in favour of the company. Last year in June 2022 too, we wrote about how Hero MotoCorp's share price was rising because of a price hike.

#2 Launch of OBD-II

Hero MotoCorp is actively launching new products.

The auto company mentioned in its last earning call that it is eyeing multiple launches in the financial year 2023-24 and targets to launch one product each quarter. True to its word, the company has launched new vehicles in both Q1 and Q2 (the Harley Davidson bike launch) of FY23.

In May 2023 (Q1FY23), the company launched an all-new version of XPulse 200 4V, conforming to the stricter emission norms. The 200-cc adventure bike comes with onboard diagnostics (OBD-II) and E20 compliant engine. The two trims are priced at Rs 1.43 lakh and Rs 1.5 lakh respectively.

The OBD-II is a self-diagnostics system that helps in detecting any errors or malfunctions in the vehicle, and brings it to the user's attention, via a malfunction indicator light.

New features of this bike include a redesigned LED headlight, a 60 mm taller windscreen, and larger hand guards that feature a contrasting black element. Engine upgrade included the 200cc oil-cooled engine which is now OBD-2 and E20-compatible.

The bike now sports three ride modes (road, off-road and rally) for its single-channel ABS which vary how the system intervenes.

#3 Strong financial performance

For the financial year 2023, Hero MotoCorp reported total revenues of Rs 343.7 billion (bn) up 15% on a YoY basis on the back of new product launches and also because of its focus on non-product revenue streams.

The company's net profit jumped 18% on a YoY basis to Rs 29.1 bn. The rise in net profit was driven by strategic price hikes undertaken by the company during the year.

Hero MotoCorp FY23 Performance

Particulars	FY23	FY22
Total revenues (Rs in bn)	343.7	298
Profit after tax (Rs in bn)	29.1	24.7
EPS (Rs)	145.7	123.8

Source: Company, Equitymaster

During the year under review, the company achieved a humungous market share of 51%. It aims to build on its market share and margin recovery in the current financial year.

#4 Aggressive EV expansion plans

Hero MotoCorp has the widest and deepest distribution system in the country. It will leverage the same to ensure its reach in the electric vehicle (EV) business.

in May 2023, said it will scale up the presence of its electric scooter range under the VIDA brand to 100 cities this year.

The company, which also announced a cut of around Rs 20,000 in the prices of VIDA V1 Plus and VIDA V1 Pro scooters, said it will utilise its existing dealer network to rapidly scale up electric vehicle operations across the country.

It has already It has already commenced the expansion plan with eight new cities - Pune, Ahmedabad, Nagpur, Nasik, Hyderabad, Chennai, Calicut and Kochi.

VIDA brand is currently present in Bengaluru, Jaipur, and Delhi aided by nearly 300 charging points at 50 locations.

Hero MotoCorp said the expansion plans for the VIDA brand will be supported through new pricing for the VIDA V1.

The VIDA V1 Plus and VIDA V1 Pro will now cost Rs 119,900 and Rs 139,900 respectively (ex-showroom price PAN-India including portable charger and FAME II subsidy), it added.

Hero MotoCorp introduced the VIDA V1 scooter in October 2022 and began customer deliveries in December 2022.

How shares of Hero Motocorp performed recently

In the past one month, Hero MotoCorp's share price has gained 8%. In 2023 so far, the stock is up 15.5%.

And in the past one year, it is up by 10.7%.

Hero MotoCorp shares touched a 52-week high today of Rs 3,171 and a 52-week low of Rs 2,246.8 touched on 28 March 2023.

About Hero MotoCorp

Hero MotoCorp Limited, formerly Hero Honda, is an Indian multinational motorcycle and scooter manufacturer based in New Delhi, India.

The company is the largest two-wheeler manufacturer in the world. In India it has a market share of about 46% in the two-wheeler category.

Hero MotoCorp has five manufacturing facilities based at Dharuhera, Gurugram, Neemrana, Haridwar, and Halol in the green field stage.

For more details about the company, you can have a look at Hero MotoCorp's factsheet and Hero MotoCorp's quarterly results on our website.

You can also compare Hero MotoCorp with its peers.

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