Bullish Stocks To Buy Hero MotoCorp: 5 Important Insights

In the series of Bullish stocks to buy hero MotoCorp is one of the best stocks from technical fundamentals point of view. The stock is a pure play of Electric vehicle. While conducting price trend analysis of the stock, the stock price has formed high highs and higher lows for last four trading days with strong volume. Refer Hero MotoCorp NSE chart below. The stock has crossed its previous swing high and is moving up towards the 2830 level which is a strong resistance for this stock. Once it trades above this level with volume, it could reach 3000 level provided broader market support.

Bullish Stocks to buy Hero MotoCorp – Technical Analysis Investing

Hero MotoCorp Limited (HEROMOTOCO) share price trading above its long and short-term moving average (50 DMA, 200 DMA). The stock price traded above its previous swing price of 2700 with a strong volume.

Momentum indicators – ADX and MACD – look strong on the daily chart. RSI 14 is above 60, which indicates a bullish price trend. With broader market support, the share price will reach the 3000 level in a month and the 3500 level in a 3 to 6-month period.

On the weekly chart, the stock has resistance at the 2830 level, which is 200 DMA also. Looking at the weekly stock chart analysis, it formed a rounding bottom pattern which considered a positive signal for the price trend.

The stock is trading at 21.3 PE and trading at 3.42 book value while the sector PE is 142.70 and Sector PB is 5.88. This shows the potential of the stock to match the industry levels. Hero MotoCorp is a consistent dividend-paying company with a strong dividend yield of ~3.5%. One can buy stock to ride the auto-cycle for the short to medium term.

Bullish Stocks to buy Hero MotoCorp – Fundamental Analysis

Hero MotoCorp Limited. is a large-cap company with a market cap of INR 55,109 crores and a face value of INR 2. The company is in the business of designing and developing technologically advanced motorcycles and scooters for customers around the world. It is the dominant market leader in India.

The company claims to be the world’s largest two-wheeler maker. The company holds over 50% share in the domestic motorcycle market in India. Hero MotoCorp sells its products in 42 countries across Asia, Africa, Latin America, and the Middle East.

Promoter’s holdings in the company remained 34.7 percent from Sept 2021 to Sept 2022. DII has increased its holdings in the company from 21.97% in Sept. 2021 to 26.89% in Sept. 2022. While DIIs are bullish on the stock looking at domestic factors, FIIs reduced their holding in the stock from 32% to 27.8% during the same period.

Hero MotoCorp Financial Analysis

Return on capital employed is ~19 percent and return on equity is ~15 percent. This data reflects a strong valuation of this counter. Hero MotoCorp Limited’s total revenue remained flat over the last three years from INR 30,756.64 crore in FY 2020 to INR 30,106.29 crore in FY2022. However, the net income of the company declined from INR 3,638.11crores in FY20 to INR 2,316.88crores in FY22. The decline of net income is mainly due to COVID lockdown and consequent slowdown in the global economy.

Management Team

The company is under the capable leadership of Dr. Pawan Munjal, Chairman, and CEO of the company. He has been in this position for over 21 consecutive years to date. Dr. Pawan Munjal is one of India’s renowned corporate leaders and champions of growth and technological innovations. Besides, he is also serving as a director on the board of a few other companies within the group and beyond.