INSUBCONTINENT EXCLUSIVE:
Global brokerages maintained their ratings on Hero MotoCorp after the motorcycle manufacturer reported a drop in profit for the September
quarter, dented by a one-time loss.
CLSA said the forthcoming emission norms would create more headwinds for Hero MotoCorp
India is going to implement BS-VI emission norms from April 2020, which will mean more difficulties for vehicle makers
year-on-year (YoY), though it was 8 per cent above its estimates
The Hong Kong-based brokerage said the company was seeing some demand revival but there are regulatory pressures ahead.
It does not see any
more margin improvement for the company, as manufacturing costs will rise after BS-VI implementation
with a price target of Rs 2,550, a 6 per cent downside
It said despite lower vehicle sales, Ebitda remained stable for the company.
The Sydney-based brokerage raised FY20-22 earnings per share
(EPS) estimates by 2-4 per cent
Macquarie also sees BS-VI transition and inventory piling up as challenges in near term.
Hero MotoCorp on Wednesday posted a 10.39 per cent
YoY fall in net profit at Rs 874.80 crore for the quarter ended September 2019 on account of one-time loss of Rs 60.11 crore
It had posted a net profit of Rs 976.28 crore in the corresponding quarter last year.
It, however, beat Street estimates.