Hero MotoCorp Will Increase Two-Wheeler Prices on July 1st; Positive Stock Trend

Hero MotoCorp, a well-known two-wheeler manufacturer in India, has declared that, as of July 1, 2024, the ex-showroom pricing of a few bikes and scooters will increase. The price rise, according to a filing with the Bombay Stock Exchange (BSE), will vary by model and market and might reach up to ₹1,500. The corporation justified this change by stating that it was necessary to partially offset rising input costs.

Hero MotoCorp’s stock moved positively after the announcement, increasing by 0.52% to hit a day high of ₹5,480. However, compared to the two-week average of 29,000 shares, the trading volume was lower than typical at 3,678 shares. With a market capitalization of ₹1,09,553.25 crore, the turnover was ₹2 crore. Notably, 9,557 buy orders were outnumbered by 52,442 sale orders.

Hero MotoCorp’s stock was trading higher than its 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs) but lower than its 5-day and 10-day SMAs, despite the recent news of a price hike. The relative strength index (RSI) for the stock over the last 14 days was 55.15, meaning it is neither overbought nor oversold. The price-to-book (P/B) ratio for the company’s stock is 6.06, and its price-to-earnings (P/E) ratio is 27.47. It has a 22.06 return on equity and 198.48 earnings per share (EPS).

Hero MotoCorp also disclosed a large investment in the manufacturer of electric scooters, Ather Energy, in addition to the price increase. The business spent ₹124 crore to purchase a 2.2% stake in Ather, increasing its overall ownership to more than 40%. Prior to this investment, Hero MotoCorp held the majority of shares in Ather.

Promoters owned a 34.76% share in Hero MotoCorp as of March 2024. In order to comply with new emission regulations, the firm already increased the pricing of a certain motorbike and scooter models by 2% in March 2023. It is anticipated that the most recent price rise, which averaged 1.5%, would solve persistent issues with input costs and company requirements.

In May 2023, Hero MotoCorp’s total sales increased 6.7% year over year to 519,474 units. The company credited the start of the monsoon season and positive economic indications for the gain, and it anticipates that as the holiday season draws near, demand will continue to rise.

However, the Ministry of Corporate Affairs in India is also keeping a close eye on Hero MotoCorp. The ministry has requested an investigation into the company’s dealings with a third-party vendor in relation to allegations of fund diversion. In spite of this, Hero MotoCorp declared that it has not heard anything official about the probe from the government.

In conclusion, Hero MotoCorp is making smart price increases and investments in electric mobility to navigate a challenging regulatory environment and growing input prices. The proactive actions taken by the company are intended to sustain its market position and foster growth in the face of dynamic economic conditions.