PUBLIC

Hero MotoCorp Ltd (HEROMOTOCO-IN)

equity strategy | 16 August 2022

Price performance
Decent operating performance; guidance upbeat
HERO BSE
Description: Hero MotoCorp Ltd is engaged in the development, manufacturing, marketing, sale Parameter MOTOCO 100
and distribution of two-wheelers and its parts and accessories. Its product categories include Close price 2,761.90 18,078
(12.08.2022)
motorcycles, scooters and parts. (Source: Refinitiv)
52-week high 2,954.45 18,800
SUMMARY 52-week low 2,146.85 15,563

Q1 earnings summary: Hero MotoCorp’s revenue increased c.53.5% y/y to INR 84.5bn in Q1
FY23. It sold 1.39m units of motorcycles and scooters in the quarter, up 36% y/y. The company 12-month price target
launched Splendor+ XTEC, the new edition of its iconic motorcycle brand Splendor, in the quarter. Parameter Rating
It also unveiled an exclusive rally edition of its widely popular motorcycle XPulse 200 4V and Mean (INR) 2,970.00
introduced the new passion Xtec in the quarter. EBITDA rose c.81.1% y/y to INR 9.4bn, resulting High 3,590.00
in an EBITDA margin expansion of c.170bps y/y (down c. 27bps q/q) to c.11.1% in Q1 FY23. Low 1,940.00
EBITDA margins expanded despite commodity headwinds and supply chain disruptions due to Target vs current 7.50%
cost-saving measures, judicious price increases and premiumisation of model line-up. Net income # of analysts 44
came in at INR 5.9bn vs INR 2.6bn in Q1 FY23. The company expects two-wheeler demand to be Mean rating^ Buy
on a healthy trajectory, supported by micro factors such as a normal monsoon, good crop cycle
and economic reopening. The company expects the margin pressure on the industry also to ease
Revenue trend
in coming quarters as commodities cool off and price recovery moves ahead of cost impact.
Parameter 2023 2024
Refinitiv average score: Positive outlook: Hero MotoCorp's current score of 8 places it among the Mean (INR) 345.7B 381.8B
top quartile of stocks scored. The score for Hero MotoCorp dropped slightly this week from 9 to 8. High 351.9B 421.7B
The recent change in the average score was primarily due to a decline in the earnings and price Low 341.9B 360.8B
momentum component scores. (Source: Refinitiv; please refer to the below report for a detailed Growth 17.00% 29.20%
analysis) forecast

 Earnings: Neutral outlook: Mixed earnings expectations and performance. # of analysts 8 9

 Fundamentals: Neutral outlook: Fundamentals relatively in line with the market.

EPS trend
 Relative valuations: Neutral outlook: Multiples relatively in line with the market. Hero Parameter 2023 2024
MotoCorp's forward P/E of 17.4 represents a 2% premium to its five-year average of 17.8. Mean (INR) 157.2 186.2
 Risk: Positive outlook: Consistent return patterns (low volatility). High 179.0 210.3
 Price momentum: Neutral outlook: Performance relatively in line with the market. Low 138.3 157.7
# of analysts 9 10
Technical outlook: The stock has made multiple tops at INR 2,900 on the weekly chart and has
Source: Refinitiv, Standard
started to move down. The trend for the stock is negative if it trades below INR 3,000. Supports are Chartered
placed at INR 2,650 and INR 2,450, while resistances are placed at INR 2,900 and INR 3,000.The *See page 14 and 15 for
RSI is above the 50 mark and moving down, showing a loss of momentum. definitions of detailed report
^Mean recommendation from all
analysts covering the company
Hero MotoCorp on a standardised 5-point scale

Source: Fox Trader, Standard Chartered

This report has been prepared by Standard Chartered Securities (India) Ltd. 1
This document has been prepared based on the information available in public domain and consensus view published by
Thomson Reuters International Services Pvt. Ltd. (Refinitiv) provided after page 4.
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stock report | 16 August 2022

Standard Chartered Securities (India) Limited Coverage History

Investment Strategy Disclaimer: INR

4,500
Standard Chartered Securities (India) Limited (SCSI) is registered as a Stock
Broker, Research Analyst and Portfolio Manager with the Securities and
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please visit https://standardcharteredtrade.co.in/. No material disciplinary
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https://www.sc.com/in/india_result.html
This document does not necessarily represent the views of the Global 2,250
Research function. The document has been prepared by SCSI. While all
reasonable care has been taken in preparing this document and/or the trading
calls, any consensus views incorporated in this material are those of the third 1,500
parties identified, and not of SCSI. Jan-16 Aug-17 Apr-19 Dec-20 Aug-22

Trading recommendations based on quantitative analysis are based on

Fair price/ Close
consensus view, index / stock’s momentum, price movement, trading volume
Sr. No Date Rating mean target Price
and other volatility parameters, as opposed to study of macro-economic
scenario and a company’s fundamentals. The trading calls and/or contents of
1 17-Feb-16 Fairly Valued 2,463.3 2,523.9
this document are not made with regard to the specific investment objectives, 2 8-May-16 Overvalued 2,650.3 2,885.1
financial situation or the particular needs of any particular person. Any 3 15-Aug-16 Overvalued 2,705.7 3,313.3
investments discussed may not be suitable for all investors. Past 4 31-Oct-16 Overvalued 2,929.7 3,348.7
performance is not necessarily indicative of future performance; the value, 5 13-Feb-17 Fairly Valued 3,188.5 3,266.5
price or income from investments may fall as well as rise. You are advised to 6 11-May-17 Overvalued 3,282.4 3,463.8
exercise your own independent judgment (with the advice of your 7 26-Jul-17 Overvalued 3,518.9 3,717.8
professional advisers as necessary) with respect to the risks and
8 7-Nov-17 Overvalued 3,110.4 3,688.9
consequences of any matter contained herein. We expressly disclaim any
9 7-Feb-18 Overvalued 3,142.4 3,566.4
liability and responsibility for any losses arising from any uses to which this
communication is put and for any errors or omissions in this communication. 10 4-May-18 Overvalued 3,174.3 3,664.1
11* 4-Feb-19 Buy 3,120.0 2,807.3
SCSI and/or its affiliates may have received any compensation for the
provision of investment banking or merchant banking or brokerage services 12 30-Apr-19 Buy 2,980.0 2,604.0
or financial advisory services or other services within the past twelve months. 13 1-Aug-19 Hold 2,670.0 2,356.1
SCSI and/or its affiliates may have received any compensation or other 14 29-Oct-19 Hold 2,800.0 2,668.9
benefits from the subject companies mentioned herein or third party in 15 7-Feb-20 Hold 2,770.0 2,411.3
connection with this document. SCSI or its associates may have managed or 16 11-Jun-20 Buy 2,360.0 2,387.3
co-managed public offering of the subject company in the past twelve months. 17 17-Aug-20 Buy 2,610.0 2,809.7
Also Research Analyst(s) or his/her/their relatives or SCSI or its associates
18 30-Oct-20 Buy 3,100.0 2,894.0
doesn’t have any beneficial ownership of 1% or more in the subject company
19 11-Feb-21 Hold 3,490.0 3,539.0
at the end of the month immediately preceding the date of publication of the
consensus report. This communication is intended for the recipient only and 20 10-May-21 Hold 3,400.0 2,860.8
no further distribution of this communication or any part thereof is permitted. 21 13-Aug-21 Buy 3,300.0 2,783.0
NSE and BSE Single Registration No. – INZ000231932 | Research Analyst: 22 15-Nov-21 Buy 3,190.0 2,683.1
INH000000966 | PMS - PM / INP000003542 | Mutual Fund ARN - 0354 | CIN: 23 14-Feb-22 Buy 3,090.0 2,718.6
U65990MH1994PLC079263 24 5-May-22 Buy 2,960.0 2,409.5
Standard Chartered Securities (India) Limited 2nd Floor, 23-25 M. G. Road, 25 16-Aug-22 Buy 2,970.0 2,761.9
Fort, Mumbai – 400 001, India. Telephone Number: 1800 - 209 - 2550. Fax *w.e.f. 18-Jan-19, we have changed our service provider from Morningstar to
Number: 022 - 6135 5900. Compliance Officer: Ankit Parmar, Email: Thomson Reuters International Services Private Limited (Refinitiv)
Ankit.Parmar@sc.com. and Telephone Number: 022 – 61355918.
Website: http://www.standardcharteredtrade.co.in
Investment Strategy Team*
Analyst Disclosures: Head Mitesh Dalal
The Research Analyst(s) responsible for the content of this document certify Director & Chief Investment Strategist
that: (1) the views expressed herein accurately reflect their personal mitesh.dalal@sc.com
opinion(s) about the subject securities and issuers and/or other subject matter
Investment Strategist Priyank Chheda
as appropriate;(2) no part of his/her/their compensation was, is or will be
directly or indirectly related to the specific recommendations or views Investment Strategist
contained in this document. (3) he/she has not served as an officer, director priyank.chheda@sc.com
or employee of the companies stated in the report. Ronak M Vora
Investment Strategist
ronakMahendra.Vora@sc.com
Technical Strategist Ashish Pai
Associate Director & Technical Strategist
ashish.pai@sc.com
Errol Crasto
Technical Strategist
errol.crasto@sc.com
Priya Iyer
Associate Strategist
priya.iyer@sc.com
*Research Analyst

4
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

Last Close Avg Daily Vol 52-Week High Trailing PE Annual Div ROE LTG Forecast 1-Mo Return
2,761.90 (INR) 534,759 2,954.45 23.8 95.00 14.8% 9.8% -4.0%
12 August 2022 Market Cap 52-Week Low Forward PE Dividend Yield Annual Rev Inst Own 3-Mo Return
NSE Exchange
551.9B 2,146.85 17.4 3.4% 295.8B 40.4% 15.0%

AVERAGE SCORE
POSITIVE OUTLOOK: HEROMOTOCO's Score Averages
current score of 8 places it among the top Automobiles & Auto Parts Group: 6.6 Large Market Cap: 6.9
quartile of stocks scored. Automobiles & Auto Parts Sector: 6.6 BSE Sensex Index: 7.6

Average Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive BAJAJ.AUTO 10 8 9 9 9
EICHERMOT 7 7 9 9 9
Neutral HEROMOTOCO 8 8 9 9 8
TVSMOTOR 8 7 6 8 8
Negative
TATAMOTORS 7 4 5 6 6
AUG-2019 AUG-2020 AUG-2021 AUG-2022

HIGHLIGHTS I/B/E/S MEAN

- The score for Hero MotoCorp dropped slightly this week from 9
to 8. Buy Mean recommendation from all analysts covering
44 Analysts the company on a standardized 5-point scale.
- The recent change in the Average Score was primarily due to a
decline in the Earnings and Price Momentum component
scores. Strong Strong
Sell Hold Buy
Sell Buy

PRICE AND VOLUME CHARTS

1-Year Return: -0.76% 5-Year Return: -28.1%

BUSINESS SUMMARY
Hero MotoCorp Limited is engaged development, manufacturing, marketing, sale and distribution of two-wheelers and its parts and accessories. Its
product category includes motorcycles, scooters, and parts. Its motorcycle products include XTREME 200S, XTREME 160R BS6, XPULSE 200T,
XPULSE 200 4V, XPULSE 200 BS6, SUPER SPLENDOR BS6, SPLENDOR ISMART BS6, SPLENDOR+ BS6, PASSION PRO BS6, NEW SUPER
SPLENDOR, GLAMOUR BS6, NEW GLAMOUR and GLAMOUR XTEC. Its scooter products include PLEASURE+ XTEC, NEW MAESTRO EDGE 125
BS6, NEW MAESTRO EDGE 110 and DESTINI 125 BS6. Its accessories include bungee nets, engine guards, fender, grip covers, helmets, knee pads,
merchandise, rim tapes, seat covers, side grabs, step women, and tank pads. It also provides HERO GENUINE 4T PLUS MOTORCYCLE ENGINE OIL
and HERO GENUINE 4T PLUS SCOOTOER ENGINE OIL. It has eight manufacturing facilities, including six in India (Dharuhera, Chittoor, Gurugram,
Haridwar, Neemrana, Gujarat) and one each in Colombia and Bangladesh.

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HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

INDICATOR COMPONENTS
The AVERAGE SCORE combines the quantitative analysis of five widely-used investment decision making tools: Earnings,
Fundamental, Relative Valuation, Risk, and Price Momentum. A simple average of the underlying component ratings is normally
distributed to rank stocks on a 1-10 scale (10 being awarded to the most favorable). These factors may be evaluated differently using
alternative methodologies and the importance of individual factors varies across industries, market capitalization and investment styles.
Additional criteria should always by used to evaluate a stock.

Earnings Fundamental Relative Valuation Risk Price Momentum

PEER ANALYSIS Currency in INR

PRICE MOMENTUM VALUATION FUNDAMENTAL ANALYSTS

Average Price 1-Mo 3-Mo 1-Yr Market Trailing Forward Dividend Net LTG I/B/E/S # of
Score Ticker (12.08.2022) Return Return Return Cap PE PE Yield Margin Forecast Mean Analysts
8 MARUTI 8,699.20 3.3% 19.9% 24.1% 2.6T 59.2 35.1 0.69% 4.6% -- Buy 45
6 TATAMOTORS 477.55 10.9% 28.3% 56.1% 1.6T -- 30.1 -- -4.2% -- Buy 30
10 M&M 1,259.45 9.8% 45.6% 62.3% 1.5T 16.9 19.7 0.92% 8.4% -- Buy 41
9 BAJAJ.AUTO 4,038.00 4.9% 12.6% 7.1% 1.2T 19.0 19.0 3.5% 18.3% 11.8% Buy 45
9 EICHERMOT 3,210.15 8.7% 34.6% 22.7% 877.7B 42.9 31.8 0.65% 17.5% 36.7% Buy 40
3 MOTHERSON 122.75 3.6% 6.9% -33.9% 554.5B 60.2 25.2 0.53% 1.1% -- Buy 22
8 HEROMOTOCO 2,761.90 -4.0% 15.0% -0.76% 551.9B 23.8 17.4 3.4% 7.8% 9.8% Buy 43
7 BOSCHLTD 17,260.95 4.5% 31.5% 20.7% 509.1B 39.4 -- 0.64% 10.0% -- Buy 4
8 TVSMOTOR 952.55 12.2% 58.2% 72.6% 452.5B 42.2 33.2 0.54% 4.0% 33.3% Buy 40
7 TIINDIA 2,239.40 12.5% 37.0% 89.0% 432.2B 52.7 43.9 0.16% 6.1% -- Buy 5
4 RTNINFRA 44.70 4.0% 43.0% -22.3% 61.8B 11.2 -- -- 3958% -- -- --
7.2 Average 3,733.33 6.4% 30.2% 27.0% 938.9B 36.7 28.4 1.2% 366.5% 22.9% Buy 31.5

PEER COMPANIES
BAJAJ.AUTO Bajaj Auto MOTHERSON Samvardhana Motherson
BOSCHLTD Bosch RTNINFRA Rattanindia Enterprises
EICHERMOT Eicher Motors TATAMOTORS Tata Motors
M&M Mahindra and Mahindra TIINDIA Tube Investments of India
MARUTI Maruti Suzuki India TVSMOTOR TVS Motor Co

Page 2 of 11
© 2022 Refinitiv. All rights reserved.
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

EARNINGS Currency in INR

NEUTRAL OUTLOOK: Mixed earnings Earnings Score Averages

expectations and performance. Automobiles & Auto Parts Group: 6.2 Large Market Cap: 6.0
Automobiles & Auto Parts Sector: 6.2 BSE Sensex Index: 6.4

Earnings Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive EICHERMOT 7 7 9 9 10
TVSMOTOR 8 8 6 9 9
Neutral HEROMOTOCO 6 6 8 8 7
BAJAJ.AUTO 10 5 6 6 6
Negative
TATAMOTORS 1 2 1 2 3
AUG-2019 AUG-2020 AUG-2021 AUG-2022

EARNINGS INDICATORS
Earnings Surprises Estimate Revisions Recommendation Changes
(33.3% weight) (33.3% weight) (33.3% weight)

TVSMOTO… HEROMOT…
EICHERM… EICHERM…

BAJAJ.AUT…
EICHERM…
TVSMOTO…
BAJAJ.AUT… HEROMOT…
TATAMOT…
TATAMOT…
TVSMOTO…

HEROMOT…
BAJAJ.AUT…
TATAMOT…

Last 4 Quarters Last 4 Weeks Last 120 Days

# Positive Surprises (>2%) 1 # Up Revisions 0 # Broker Upgrades 7
# Negative Surprises (<-2%) 3 # Down Revisions 1 # Broker Downgrades 0
# In-Line Surprises (within 2%) 0 Avg Up Revisions 0.00%
Avg Surprise -19.1% Avg Down Revisions -2.3%

HIGHLIGHTS PRICE TARGET

- Hero MotoCorp currently has an Earnings Rating of 7. The average The chart indicates where analysts predict the stock price will be within
Earnings Rating for its Auto & Truck Manufacturers industry is 7.5 and the next 12 months, as compared to the current price.
the S&P BSE SENSEX index average is 6.4.
3,600 HIGH 12-Month Price Target
- On 12.08.2022, the company announced quarterly earnings of 29.54 Mean (INR) 2,970.00
per share, a negative surprise of -24.2% below the consensus 38.96. 3,200
2,761.90 MEAN High 3,590.00
Over the past 4 quarters, the company has reported 1 positive, 3 2,800
negative, and 0 in-line surprises. The average surprise for this time Low 1,940.00
period has been -19.1%. 2,400 Target vs. Current 7.5%
2,000 LOW # of Analysts 44
- HEROMOTOCO's current quarter consensus estimate has increased
notably over the past 90 days from 32.12 to 38.96, a gain of 21.3%. 1,600
This improvement is significantly greater than its industry average of Current Price Price Target
(INR)
3.0% during the same time period.

Page 3 of 11
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HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

EARNINGS PER SHARE

Actuals Estimates
48.00 HIGH

Earnings per share (EPS) is calculated 44.00 Quarterly 09-22 12-22

by dividing a company's earnings by the MEAN
Mean 41.960 41.660
number of shares outstanding. Analysts 40.00 37.31
tend to interpret a pattern of increasing 35.21 High 44.410 47.490
36.00 LOW
earnings as a sign of strength and flat Low 39.500 35.830
or falling earnings as a sign of 32.00
30.59
29.54 # of Analysts 2 2
weakness.
28.00
The charts provide a comparison 09-21 12-21 03-22 06-22 09-22 12-22
between a company's actual and
estimated EPS, including the high and Actuals Estimates
low forecasts. 240

210 HIGH Annual 2023 2024

MEAN Mean 157.2 186.2
180
146 High 179.0 210.3
LOW
150 Low 138.3 157.7
115.90
120 # of Analysts 9 10

90.00
2021 2022 2023 2024

MEAN ESTIMATE TREND ANALYST RECOMMENDATIONS

Q Q Y Y Price I/B/E/S Mean: Buy (44 Analysts)
09-22 12-22 2023 2024 Target
Strong Buy 18
Current 41.960 41.660 157.2 186.2 2,970.00
30 Days Ago 44.580 43.290 161.7 188.3 2,930.00 Buy 9
90 Days Ago 38.250 40.990 153.3 178.1 2,890.00 Hold 12
% Change (90 Days) 9.7% 1.6% 2.5% 4.5% 2.8%
Sell 5
Current Fiscal Year End: 03-23
Strong Sell 0
Next Expected Report Date: 12.08.2022

EARNINGS SURPRISES
Comparing a company's actual earnings to the mean expectation of Surprise Detail (Last 6 Periods)
analysts results in a difference referred to as a 'positive' or 'negative'
surprise. Research has shown that when a company reports a Surprise Announce Period End Actual Mean Surprise
surprise, it is often followed by more of the same surprise type. Type Date Date EPS EPS (%)
Surprise Summary (Last 12 Quarters) Negative 12.08.2022 30.06.2022 29.540 38.960 -24.2%
Positive 03.05.2022 31.03.2022 30.590 27.650 10.6%
Surprise Type Amount Percent
Negative 10.02.2022 31.12.2021 35.210 44.680 -21.2%
Positive Quarters (> 2%) 7 58.3%
Negative 12.11.2021 30.09.2021 37.310 44.380 -15.9%
Negative Quarters (< -2%) 5 41.7%
Negative 12.08.2021 30.06.2021 12.820 38.910 -67.1%
In-Line Quarters (within 2%) 0 --
Positive 06.05.2021 31.03.2021 44.080 33.910 30.0%

ANNUAL REVENUE
A pattern of increasing sales in Actuals Estimates
conjunction with a rising EPS may
influence a buy recommendation, while 480B
2023 2024
flat or falling sales and faltering 440B
earnings may explain a sell HIGH Mean 345.7B 381.8B
recommendation. A rising EPS with flat 400B High 351.9B 421.7B
or falling sales may result from MEAN
increased cost efficiency and margins, 360B LOW Low 341.9B 360.8B
rather than market expansion. This 310.0B Forecasted Growth 17.0% 29.2%
chart shows the sales forecast trend of 320B 292.5B 295.5B
# of Analysts 8 9
all analysts and the highest and lowest
projections for the current and next 280B
2020 2021 2022 2023 2024
fiscal year.

Page 4 of 11
© 2022 Refinitiv. All rights reserved.
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

FUNDAMENTAL
NEUTRAL OUTLOOK: Fundamentals relatively Fundamental Score Averages
in-line with the market. Automobiles & Auto Parts Group: 5.3 Large Market Cap: 6.4
Automobiles & Auto Parts Sector: 5.3 BSE Sensex Index: 6.3

Q3 Q4 Q1 Q2
Fundamental Score Trend Peers 2021 2021 2022 2022 Current 3Y Trend
BAJAJ.AUTO 10 9 10 10 7
Positive
EICHERMOT 8 8 9 9 6
Neutral HEROMOTOCO 8 8 8 8 6

Negative TATAMOTORS 4 3 3 3 3

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 TVSMOTOR 4 4 3 3 2
2020 2021

FUNDAMENTAL INDICATORS
Profitability Debt Earnings Quality Dividend
(25% weight) (25% weight) (25% weight) (25% weight)

BAJAJ.… TATAM…
EICHER… BAJAJ.…
HEROM… HEROM…

BAJAJ.… TATAM…
EICHER… EICHER… HEROM…
TVSMO… TVSMO…

HEROM… TATAM… BAJAJ.…

TVSMO…
TATAM… TVSMO… EICHER…

Revenue Growth -4.6% Current Ratio 1.9 Oper. Cash Yield -4.4% Dividend Growth 5.6%
For year over year For interim period For latest 12 months For year over year
ending 03-2022 ending 03-2022 ending 03-2022 ending 03-2022
Gross Margin 26.6% Debt-to-Capital 1.5% Accruals 5.3% Dividend Payout 81.9%
For latest 12 months For annual period For latest 12 months For latest 12 months
ending 03-2022 ending 03-2022 ending 03-2022 ending 03-2022
Return On Equity 14.8% Interest Funding 0.9% Days Sales In Inv. 29.9 Dividend Coverage 1.5
For interim period For interim period For annual period For annual period
ending 03-2022 ending 03-2022 ending 03-2022 ending 03-2022
Net Margin 7.8% Interest Coverage 61.6 Days Sales In Rec. 28.7 Current Div. Yield 3.4%
For latest 12 months For interim period For annual period For latest 12 months
ending 03-2022 ending 03-2022 ending 03-2022 ending 08-2022

HIGHLIGHTS
- The Fundamental Rating for Hero MotoCorp declined significantly over - The company's operating cash yield has been lower than its industry
the last quarter from a bullish 8 to a relatively neutral 6. The average group average for each of the past five years.
Fundamental Rating for its Automobiles & Auto Parts industry group is - Of the 142 firms within the Automobiles & Auto Parts industry group,
5.3 and the S&P BSE SENSEX index average is 6.3. Hero MotoCorp is among 88 companies that pay a dividend. The
- The company's net margin has been higher than its industry group stock's dividend yield is currently 3.4%.
average for each of the past five years.
- The company's current ratio has been higher than its industry group
average for each of the past five years.

Page 5 of 11
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HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

RELATIVE VALUATION
NEUTRAL OUTLOOK: Multiples relatively in-line Relative Valuation Score Averages
with the market. Automobiles & Auto Parts Group: 5.7 Large Market Cap: 3.4
Automobiles & Auto Parts Sector: 5.7 BSE Sensex Index: 3.5

Relative Valuation Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive TATAMOTORS 8 8 6 6 6
HEROMOTOCO 7 6 5 5 5
Neutral BAJAJ.AUTO 6 4 4 4 4
TVSMOTOR 6 5 3 3 3
Negative
EICHERMOT 3 3 2 2 2
AUG-2019 AUG-2020 AUG-2021 AUG-2022

RELATIVE VALUATION INDICATORS

Price to Sales Trailing PE Forward PE
(50% weight) (25% weight) (25% weight)

HEROMOT…
TATAMOT… BAJAJ.AUT…
BAJAJ.AUT…
HEROMOT… EICHERM…
HEROMOT…
TVSMOTO… TATAMOT…
TVSMOTO…

BAJAJ.AUT… EICHERM…
EICHERM… TVSMOTO…

TATAMOT…

Price to Sales 1.9 Trailing PE 23.8 Forward PE 17.4

5-Yr Average 1.9 5-Yr Average 18.2 5-Yr Average 17.8
Rel. to 5-Yr Avg. 2% Discount Rel. to 5-Yr Avg. 31% Premium Rel. to 5-Yr Avg. 2% Discount
BSE Sensex Index 3.7 BSE Sensex Index 24.6 BSE Sensex Index 22.4
Rel. to BSE Sensex 50% Discount Rel. to BSE Sensex 3% Discount Rel. to BSE Sensex 22% Discount

HIGHLIGHTS
- Hero MotoCorp currently has a Relative Valuation Rating of 5 which is - HEROMOTOCO's Trailing P/E of 23.8 represents a 31% Premium to
significantly above the S&P BSE SENSEX index average rating of 3.5. its 5-year average of 18.2. If the Trailing P/E returned to historical
form, the stock would trade at 2,110.01.
- Compared to the Automobiles & Auto Parts industry group,
HEROMOTOCO is currently trading at a significant discount based on - HEROMOTOCO's Forward P/E of 17.4 represents a 2% Discount to its
both Trailing P/E and Forward P/E. 5-year average of 17.8.
- HEROMOTOCO's Price to Sales ratio of 1.9 represents a 2% Discount
to its 5-year average of 1.9.

Page 6 of 11
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HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

PRICE TO SALES TRAILING PE

The most recent week's close price divided by the revenue per share. The most recent week's close price divided by the sum of the four most
recently reported quarterly earnings.
Price to Sales: 1.9 Trailing PE: 23.8
5-Year Average: 1.9 5-Year Average: 18.2
BSE Sensex Index Average: 3.7 BSE Sensex Index Average: 24.6
Automobiles & Auto Parts Group Average: 1.2 Automobiles & Auto Parts Group Average: 46.4
2.8 28
2.6 26
2.4 24
2.2 22
2.0 20
5-Yr Average
1.8 18 5-Yr Average
1.6 16
1.4 14
1.2 12
1.0 10
0.8 8
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

FORWARD PE FORWARD PEG

The most recent week's close price divided by the sum of the four The Forward P/E divided by the five-year forecasted growth rate.
upcoming quarterly consensus estimates.
Forward PE: 17.4 Forward PEG: 1.8
5-Year Average: 17.8 5-Year Average: 2.6
BSE Sensex Index Average: 22.4 BSE Sensex Index Average: 1.2
Automobiles & Auto Parts Group Average: 29.6 Automobiles & Auto Parts Group Average: 1.2
30 >5.0
28 4.5
26 4.0
24 3.5
22 3.0
20 2.5 5-Yr Average

18 5-Yr Average 2.0

16 1.5
14 1.0
12 0.5
10 0.0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

Page 7 of 11
© 2022 Refinitiv. All rights reserved.
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

RISK
POSITIVE OUTLOOK: Consistent return Risk Score Averages
patterns (low volatility). Automobiles & Auto Parts Group: 7.1 Large Market Cap: 8.9
Automobiles & Auto Parts Sector: 7.1 BSE Sensex Index: 9.5

Risk Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive BAJAJ.AUTO 10 10 10 10 10
HEROMOTOCO 10 9 10 10 10
Neutral TVSMOTOR 9 10 10 10 10
EICHERMOT 10 10 10 10 9
Negative
TATAMOTORS 9 7 9 9 9
AUG-2019 AUG-2020 AUG-2021 AUG-2022

RISK INDICATORS
Magnitude of Returns Volatility Beta (1-year) Correlation
(25% weight) (25% weight) (25% weight) (25% weight)

BAJAJ.… TATAM…
BAJAJ.…
EICHER… BAJAJ.…
EICHER…
HEROM… EICHER…
HEROM…
TVSMO… HEROM…
TVSMO…
TATAM… TVSMO…

BAJAJ.…
TATAM…
TVSMO…

TATAM…
EICHER…
HEROM…

Daily Returns (Last 90 Days) Standard Deviation Beta vs. BSE Sensex 0.85 Correlation vs. BSE Sensex
Best 5.9% Last 90 Days 1.66 Positive Days Only 0.92 Last 90 Days 41%
Worst -3.4% Last 60 Months 9.28 Negative Days Only 0.83 Last 60 Months 43%
Monthly Returns (Last 60 Months) Intra-Day Swing (Last 90 Days) Beta vs. Group 0.75 Correlation vs. Group
Best 35.7% Average 2.4% Positive Days Only 0.83 Last 90 Days 52%
Worst -22.2% Largest 4.5% Negative Days Only 0.65 Last 60 Months 59%

HIGHLIGHTS RISK ANALYSIS

- Hero MotoCorp currently has a Risk Rating of 10 while the S&P Last 90 Days Last 60 Months
BSE SENSEX index has an average rating of 9.5. Best Worst # # Largest Best Worst
- On days when the market is up, HEROMOTOCO tends to Daily Daily Days Days Intra-Day Monthly Monthly
perform in-line with the S&P BSE SENSEX index. On days Peers Return Return Up Down Swing Return Return
when the market is down, the shares generally decrease by HEROMOTOCO 5.9% -3.4% 37 27 4.5% 35.7% -22.2%
less than the index.
- In both short-term and long-term periods, HEROMOTOCO has BAJAJ.AUTO 4.1% -5.1% 40 24 8.5% 29.7% -30.0%
shown high correlation (>= 0.4) with the S&P BSE SENSEX EICHERMOT 7.6% -3.2% 37 27 7.5% 26.9% -21.3%
index. Thus, this stock would provide only low levels of
diversification to a portfolio similar to the broader market. TATAMOTORS 6.6% -5.1% 36 28 7.8% 51.3% -44.9%
- Over the last 90 days, the daily price fluctuations of TVSMOTOR 4.3% -3.4% 41 23 6.9% 19.6% -31.7%
HEROMOTOCO have been in-line with the S&P BSE SENSEX
index firms. BSE Sensex 2.9% -2.7% 34 30 3.3% 14.4% -23.1%

Page 8 of 11
© 2022 Refinitiv. All rights reserved.
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

PRICE MOMENTUM Currency in INR

NEUTRAL OUTLOOK: Performance relatively Price Momentum Score Averages

in-line with the market. Automobiles & Auto Parts Group: 6.5 Large Market Cap: 7.0
Automobiles & Auto Parts Sector: 6.5 BSE Sensex Index: 7.5

Price Momentum Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive BAJAJ.AUTO 5 7 9 10 10
EICHERMOT 5 5 10 10 10
Neutral TATAMOTORS 9 4 8 10 10
TVSMOTOR 8 6 10 10 10
Negative
HEROMOTOCO 5 5 9 8 7
AUG-2019 AUG-2020 AUG-2021 AUG-2022

PRICE MOMENTUM INDICATORS

Relative Strength Seasonality
(70% weight) (30% weight)

BAJAJ.AUT…
EICHERM…
EICHERM…
TVSMOTO…
TATAMOT…
BAJAJ.AUT…
TVSMOTO…
TATAMOT…
HEROMOT…

HEROMOT…

Relative Strength Indicator (Scale from 1 to 100) Average Monthly Return (Last 10 Years)
HEROMOTOCO Industry Avg Aug Sep Oct
Last 1 Month 51 56 Company Avg 3.4% 0.13% -0.17%
Last 3 Months 53 53 Industry Avg 2.5% 5.3% 6.4%
Last 6 Months 50 52 Industry Rank 20 of 94 8 of 93 8 of 93

PRICE PERFORMANCE
Daily close prices are used to calculate the HEROMOTOCO HEROMOTOCO BSE 100
performance of the stock as compared to a
BSE 100 Close Price (12.08.2022) 2,761.90 18,078
relevant index over five time periods.
52-Week High 2,954.45 18,800
-0.3%
1-Week 52-Week Low 2,146.85 15,563
1.7%

1-Month
-4% - On 12.08.2022, HEROMOTOCO closed at 2,761.90, 6.5%
10.2% below its 52-week high and 28.6% above its 52-week low.
- HEROMOTOCO shares are currently trading 1.2% above their
15% 50-day moving average of 2,729.78, and 7.4% above their 200-
3-Month
12.1% day moving average of 2,571.14.
12.2% - The S&P BSE 100 index is currently 3.8% below its 52-week
YTD high and 16.2% above its 52-week low.
2.6%

-0.8%
1-Year
8.7%

Page 9 of 11
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HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers
DETAILED STOCK REPORT TIPS
The Stock Report from Refinitiv is a comprehensive, company-specific analysis that
includes a proprietary Stock Rating along with underlying component indicators and
supportive data elements. The report is updated daily, although some of the data
elements and the ratings are updated weekly.
Average Score
The Stock Reports Plus Average Score combines a quantitative analysis of five
widely-used investment decision making tools - Earnings, Fundamental, Relative
Valuation, Risk, and Price Momentum. First, a simple average of the five underlying
component ratings is calculated. Then, a normal distribution is used to rank each
stock across the market on a scale of 1 to 10, with 10 being most favorable. A
score of 8 to 10 is considered positive, 4 to 7 is neutral, and 1 to 3 is negative.
These five factors may be evaluated differently using alternative methodologies,
and the importance of individual factors varies across industry groups, market
capitalization and investment styles. Additional criteria should always be used to
evaluate a stock.
A company must have sufficient data available for at least three of the five
component indicators in order to receive an overall Average Score. Approximately
85% of the stocks within the coverage universe meet the criteria to generate a
score.
Indicator Components
The five indicators that comprise the stock rating are displayed. Like the stock
rating, the component rating scale is 1 to 10, with 10 being best. A company will
receive an ‘NR’ for No Rating if the required data elements or criteria are not met. A
detailed section for each component is included in the report.
Indicator Trends
Within each component section, historical score trends are displayed, typically using
a 4-week moving average over a timeframe of the past three years. The dotted
orange line indicates the average of the scores over those three years. The most
recent occurrences of the best and worst scores are also displayed on the chart in
grey boxes to put the current score into historical context.
Next to the trend chart for the company, current score averages are included, along
with peer company comparisons of values from 6 months ago, 3 months ago, 1
month ago, the most recent value from 1 week ago, and the current score. The four
closest industry peers are presented based on similar market capitalization.
Peer Analysis
● The Refinitiv Business Classification (TRBC) schema is used for industry
comparisons. It is designed to track and display the primary business of a
corporation by grouping together correlated companies that offer products and
services into similar end markets. The system includes 10 Economic Sectors, 28
Business Sectors, 54 Industry Groups, and 136 Industries.
● The Peer Analysis section of the report compares the company to its ten closest
peers. The peers are selected from the industry based on similar market
capitalization. The peer listing may have fewer than ten companies if there are
fewer than ten companies within that industry classification.
Highlights
The automated text-generation system from Refinitiv creates highlights
summarizing the most noteworthy data. The bullets will vary by company and will
change from week to week as different criteria are met.
Earnings
The Earnings Rating is based on a combination of three factors: earnings surprise,
estimate revision, and recommendation changes. Each factor is equally weighted.
Then, equal deciles are used to rank each stock across the market on a scale of 1
to 10, with 10 being most favorable. A stock needs to have at least two of the three
earnings factors in order to receive a score.
● Earnings Surprises - The number of positive and negative surprises within the
last 4 periods (quarters or years).
● Estimate Revisions - The number of up and down revisions and the average
percentage change of those revisions within a 4 week period.
● Recommendation Changes - The number of broker upgrades and downgrades in
the last 120 days.
Price Target
The price target is based on the predictions of analysts covering the stock and
shows the high, low and mean price expected within the next 12 months.
Earnings Per Share
The quarterly and annual earnings per share are presented when available, along
with the mean, high and low. Quarterly data is displayed for the past 4 quarters
(actual) and the next 2 quarters (estimated). Annual data is displayed for the past 2
years (actual) and the next 2 years (estimated).
Page 10 of 11
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DETAILED STOCK REPORT
Report Date: 16-Aug-2022
Mean Estimate Trend
The mean estimates show how the consensus has changed over the past 30 days
and 90 days for the upcoming two quarters (when available) and two years. The
percentage change is calculated for the company as a means for comparison by
measuring the difference between the current consensus estimate and that of 90
days ago.
Analyst Recommendations
The I/B/E/S Mean is the average recommendation of all analysts covering the stock,
as provided by I/B/E/S, the Institutional Brokers Estimate System, from Refinitiv.
The recommendations are presented on a five-point standardized scale: strong buy,
buy, hold, reduce, and sell.
Earnings Surprises
● The surprise summary includes the total number of time periods (and
percentage) in the last 12 quarters (quarterly) or last 4 years (annual) in which
earnings surprises were positive, negative, or in-line. In order to be recognized
as a positive or negative surprise, the percent must be greater than 2% above or
2% below the consensus, respectively.
● The surprise detail section includes a listing of the company's quarterly earnings
reported for the most recent 6 periods (quarters or years). The consensus
analyst estimate is provided to determine if the actual earnings report
represented a positive surprise, negative surprise, or in-line result.
Fundamental
The Fundamental Rating is based on a combination of four fundamental component
factors: profitability, debt, earnings quality, and dividend. Companies that do not
pay a dividend are not penalized. Each factor is equally weighted. Then, equal
deciles are used to rank each stock across the market on a scale of 1 to 10, with 10
being most favorable. A stock needs to have at least two of the four fundamental
factors present in order to receive a score.
● Profitability is comprised of four data elements.
- Revenue Growth: (Net Sales – Previous Net Sales) / Previous Net Sales
- Gross Margin: Gross Profit / Net Sales
- Return on Equity: Net Income / Total Equity
- Net Margin: Net Profit / Net Sales
● Debt is comprised of four data elements.
- Current Ratio: Current Assets / Current Liabilities
- Debt-to-Capital: Total Debt / Total Capital
- Interest Funding: (Interest Expense on Debt + Preferred Cash Dividends) /
Funds from Operations
- Interest Coverage: Earnings before Interest and Taxes / (Interest Expense on
Debt + Preferred Cash Dividends)
● Earnings Quality is comprised of four data elements.
- Operating Cash Yield: (Operating Cash Flow – Net Income) / Net Income
- Accruals: (Net Income – Operating Cash Flow – Investing Cash Flow) /
Average Net Operating Assets
- Days Sales in Inventory: 365 / (Cost of Goods Sold / Inventory)
- Days Sales in Receivables: 365 / (Net Sales / Receivables)
● Dividend is comprised of four data elements. The company must have a current
dividend yield.
- Dividend Growth Rate: (Dividends per Share – Previous Dividends per Share)
/ Previous Dividends per Share
- Dividend Payout: Dividends per Share / Earnings per Share
- Dividend Coverage: Funds from Operations / Cash Dividends
- Dividend Yield: Annual Dividends per Share / Current Market Price per Share
Indicator Trend
The fundamental indicator trend displays either quarterly scores over the past three
years or annual scores over the past six years, depending on the reporting periods
for the country. The best and worst scores can be easily determined from the
values shown on the chart for each quarter or year.
Relative Valuation
The Relative Valuation Rating is based on a combination of three component
factors: Price to Sales (50% weight), Trailing P/E (25% weight), and Forward P/E
(25% weight). After the weightings are considered to combine individual factors,
equal deciles are used to rank each stock across the market on a scale of 1 to 10,
with 10 being most favorable. These common valuation metrics are evaluated
against the overall market, the index, and the company's own historic 5-year
averages. A stock needs to have at least one of the three relative valuation factors
in order to receive a score.
● Price to Sales: Close Price / (Sales for 4 Quarters or 1 Year / Shares
Outstanding)
● Trailing P/E: Close Price / Most Recent 4 Quarters or 1 Year of Earnings
● Forward P/E: Close Price / Upcoming 4 Quarters or 1 Year of Earnings
HERO MOTOCORP (HEROMOTOCO-IN)
Automobiles & Auto Parts / Automobiles & Auto Parts / Auto & Truck Manufacturers DETAILED STOCK REPORT
Report Date: 16-Aug-2022

Valuation Averages
Negative values are excluded when calculating the averages. A maximum value of
100 is placed on Trailing P/E and Forward P/E, a maximum value of 5 is placed on
Forward PEG, and a maximum value of 20 is placed on Price to Sales when
calculating the averages. Higher values are rounded down to the maximum for the
averages.

Valuation Multiples
The valuation multiples provide the Trailing P/E, Forward P/E, Forward PEG, and
Price to Sales for the company and the S&P 500 index average. In addition, a
comparison of the current company’s values to its 5-year average and an industry
average are presented. A discount occurs when the company’s ratio is valued
more favorably (lower) than that to which it is compared.

Risk
The Risk Rating displays stocks on a scale of 1 to 10 with 10 being awarded to the
least risky stocks. It is derived by looking at a series of long-term (5-year) and
short-term (90-day) stock performance measures including volatility, magnitude of
returns, beta, and correlation. Each factor is equally weighted. Then, equal deciles
are used to rank each stock across the market. A stock needs to have at least two
of the four risk factors in order to receive a score.

● Magnitude of Returns – The best / worst daily returns in the past 90 days and the
best / worst monthly returns in the past 60 months.
● Volatility – The standard deviation of the stock price over the last 90 days and
last 60 months, along with the average and largest intra-day stock swing.
● Beta – Measures the tendency of a security’s returns to respond to swings in the
market, based on the beta of the company versus the relevant index.
● Correlation – Determines how closely the returns of the stock and the relevant
index move together, measured over the last 90 days and last 60 months.

Risk Analysis
Price analysis for the company and the relevant index is provided over two time
periods. Daily analysis is provided for the last 90 days, whereas monthly statistics
are used for the last 60 months.

Price Momentum
The Price Momentum Rating is based on a combination of two technical
performance factors: relative strength (70% weight) and seasonality (30% weight).
After the weightings are considered to combine individual factors, equal deciles are
used to rank each stock across the market on a scale of 1 to 10, with 10 being most
favorable. A stock needs to have data for the relative strength factor in order to
receive a score.

● Relative Strength – The relative strength of the company for the last 1 month, 3
months, and 6 months on a scale of 1 to 100.
● Seasonality – The average monthly return (price performance) for the current
month and next 2 months for the company and industry, over the past 10 years.
A lower industry rank indicates a higher return.

Price Performance
Daily close prices are used to calculate the price performance of the stock. The
performance of the relevant index is also displayed as a means of comparison.

DISCLAIMER
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All information in this report is assumed to be accurate to the best of our ability.
Refinitiv is not liable for any errors or delays in Refinitiv content, or for any actions
taken in reliance on such content.

Any forward-looking statements included in the Refinitiv content are based on

certain assumptions and are subject to a number of risks and uncertainties that
could cause actual results to differ materially from current expectations. There is no
assurance that any forward-looking statements will materialize.

The content in this Refinitiv report does not constitute investment advice or a
recommendation to buy or sell securities of any kind. Past performance is not a
guarantee of future results. Investors should consider this report as only a single
factor when making an investment decision.

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