Shares of the company rose nearly 3% to Rs 2,880 on the National Stock Exchange (NSE). Earlier today, the stock hit an 8-month high of Rs 2,912.65. The gains were supported by strong volumes of over one million shares, well above the 6-month average trading volume of over 400,000 shares.
The country’s largest two-wheeler maker saw total sales rise nearly 7% year on year in May to 5,19,474 units, driven by more than 8% growth in motorcycle sales to 4,89,336 units.
While the company saw sales growth in the domestic market, it struggled to sell vehicles in international markets.
According to ICICIdirect, Hero MotoCorp led the volume recovery in the two-wheeler pack, with volumes jumping 31% month-over-month. Motorcycle volumes were up 33% month over month.
However, the overall volume growth reported by the company was largely in line with analysts’ expectations.
Despite better numbers, the stock is the least favorite of the bunch. The stock underperformed its peers, Bajaj Auto and TVS Motor by a wide margin. While TVS Motor Co and Bajaj Auto have gained more than 20% each so far in 2023, Hero MotoCorp has only gained 5%.
“In the 2W space, we like Bajaj Auto as we expect a rebound in exports within 3-4 months as the scenario may improve in Africa. Also, EV strength has gained
of Chetak and the upcoming launch of e-3W may be additional positives,” said Ashwin Patil of LKP Securities in his report.
For Nomura Financial Advisory and Securities too, Bajaj Auto is the preferred stock in the two-wheeler space.
Most analysts believe that volume recovery for the two-wheeler industry will occur steadily in FY24.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)