Hero MotoCorp share price dropped by more than 2%
To begin with, on Feb 24, the share price of Hero MotoCorp dropped to more than 2% to its five-year low at Rs 2191.65 in intraday trade on BSE. Also, it looked on the course to extend the losses into the seventh consecutive session. Besides, the stock has stood under pressure amidst dropping sales.
However, the company had posted a 14.5% growth in its Dec quarter profit at Rs 880 crores. So then, this stood against Rs 769.1 crores in Oct-Dec of 2018. Also, the earnings before interest, tax, depreciation, and amortization (EBITDA) fell to 6% to Rs 1,039 crores. Yet, the margin has seen 80 bps expansion YoY at 14.8% in December quarter due to lower raw material cost.
Hero Moto anticipates the BS4 inventory to remain cleared before the end of March deadline. Also, in Feb 2020, BS4 production stood limited to 20% of total production. However, the given BS4 inventory went well over a month. Besides, BS6, ramp-up remains a key challenge.
Moreover, Morgan Stanley stated it stood underweight on the stock with a target price of Rs 2,143 per share. So then, according to Morgan Stanley, the auto original equipment manufacturers have high localization rules. Yet, they do acquire some components from China.
Hence, the shares of Hero MotoCorp traded 1.75% down at Rs 2,200.80 on BSE in the afternoon session today.