Shares of Hero MotoCorpNSE 4.81 % jumped over 4 per cent to Rs 2,790 and looked on course to break its losing streak of last five consecutive sessions. The stock got traction after the company on Sunday reported a 13.5 per cent rise in sales to over 6.5 lakh units in May over the previous month. The company surpassed the six-lakh units mark in monthly sales for the first time since February 2019, when it had sold 617,215 units of motorcycles and scooters. The company's fourth-quarter numbers were subdued as it reported a 24.51 per cent year-on-year fall in profit at Rs 730.32 crore for the quarter ended March. Its revenue declined 7.92 per cent in Q4 to Rs 7,884.96 crore over Rs 8,564.04 crore reported for the same quarter last year.
In a recent report, brokerage Motilal Oswal Securities has ascribed a neutral view on the stock with a target price of Rs 2,912, adding that the new launches in scooter and premium segment should help Hero MotoCorp to gain market share, but weak positioning in these segments remains a key headwind. The brokerage expects scooter and premium motorcycle segments to grow at a faster rate due to value migration and up-trading from the executive segment. IIFL Securities in its latest report has given an add recommendation on the stock with a target price of Rs 2,800. "Hero would be ready with BS-VI vehicles in time for the transition. Coming to exports, the company has entered 37 markets. Based on its learnings post the initial entry, it is planning country-specific strategy and products to increase traction," said the brokerage. The company's management believes that two-wheeler penetration in India leaves significant room for an increase. A large number of low-income households are still below the affordability bracket which would drive future industry growth, the brokerage added.