Yahoo Finance Hero MotoCorp struggles with market share despite new launches, HDFC Securities maintains 'Reduce' rating
Hero MotoCorp's market share in the motorcycle sector has dipped by 380 basis points to 44.5% in the current fiscal year, according to a research report issued by HDFC Securities on Monday. This decline persists despite the company's numerous product launches, including Passion Plus, new Glamor, Xtreme160R 4V, X440, and Karizma.
The company has been steadily losing ground in the competitive 125cc segment since FY20. Even the recent introduction of Xtreme160R 4V failed to bolster Hero MotoCorp's standing in the premium segment. The firm's traditionally weaker position in this sector suggests that establishing a strong presence may take longer than anticipated.
Additionally, Hero MotoCorp's scooter market share remained stagnant year-on-year despite the introduction of the Xoom110. Potential challenges may arise from the current monsoon deficit across India, particularly in major motorcycle markets. This weather event could potentially dampen demand in the entry-level motorcycle segment, presenting further headwinds for the company.
Despite these challenges, HDFC Securities' valuation of Hero MotoCorp remains inexpensive compared to its industry peers. However, due to the company's continued struggle to regain its market share despite numerous attempts, HDFC Securities has maintained its 'Reduce' rating on Hero MotoCorp and set a target price of Rs 2672. This is based on a valuation of 14 times June 2025 earnings per share, indicating that the company's stock might remain under pressure.
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