Hero Motocorp’s high-end shift earns it a D-St premium
After a long hiatus, the stock of Hero Motocorp is back on investors’ radar driven by rising conviction on premiumisation led earnings growth and higher two-wheeler volume growth on a low base. This is likely to offset the concern about a drop in the market share in the medium term.
The stock has outperformed the Nifty 50 index by 22% in the past six months after underperforming by 37% in the previous three years.
The share of premium bikes for India’s largest two-wheeler maker has been been rising, establishing its positioning in the premium segment through Karzima and Harley-Davidson bikes. The premium variant in the 125cc bike segment Xtec contributed about 30% to its total portfolio in the September quarter driven by its largest selling bikes