Key Points
After a long hiatus, the stock of Hero Motocorp is back on investors radar driven by rising conviction on premiumisation led earnings growth and higher two-wheeler volume growth on a low base..
The premium variant in the 125cc bike segment Xtec contributed about 30% to its total portfolio in the September quarter driven by its largest selling bikes Splendor and Glamour...
Due to the rising share of premium variants and higher product prices, the companys average selling price per unit was Rs 66,680 in the second quarter of FY24, the highest ever and around Rs 7,000 per unit from the beginning of the last fiscal year..
Even though the companys total volume is 26% lower than the peak level seen in FY19, the average selling price expansion has helped in achieving revenue in FY23 similar to the pre-covid period...
Analysts expect the companys average selling price to touch Rs 66,200 and Rs 67,800 in the current and the next fiscal years with a volume growth of 7-9%..
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