Hero MotoCorp gains 16% this year so far, up 25% in last one year; should you buy?

livemint.com:

Hero MotoCorp (HMCL) as the 'Choice ka Techno Funda' pick. The brokerage recommends buying Hero Moto in cash at ₹3,170 and add up to ₹3,080 for a target price of ₹3,620 for a duration of 1-3 months. This target indicates an upside of 14.5 percent.

Meanwhile, the stock has risen 25 percent in the last 1 year and 16 percent in 2023 YTD. However, it has underperformed its benchmark. In comparison, Nifty Auto has gained over 31 percent in the last 1 year as well as in 2023 YTD.

It has given positive returns in 7 of the 10 months of the current calendar year and negative in 3 - August (-9 percent), March (-3 percent), and February (-12.5 percent). It rose the most in July, up 10 percent. The stock has gained 4 percent in October so far following an almost 5 percent rise in September.

It also hit its 52-week high of ₹3,242.85 in August this year but has consolidated since hitting its peak, down a little over 2 percent. Meanwhile, it advanced over 40 percent from its 52-week low of ₹2,246.75, hit in March 2023. The brokerage house noted that in Q1FY24, HMCL has delivered largely in-line performance on all fronts with the revenue up 4.5 percent YoY and 5.5 percent QoQ to ₹8,767 crore (vs an estimate of ₹8,932 crore).

"With the introduction of new variants such as the Xtec editions of the Splendor Plus, Passion, Super Splendor motorcycles, and the Xtreme 160R Stealth 2.0 edition, the company has already begun to add premium features to its existing product line. The firm has 1) a lower threat to EV transition (scooter 8 percent of overall volume); 2) premiumisation of portfolio; 3) scaling up the EV operation; 4) entry into middleweight MC with HD-X440," it said. 1.