Mixed Brokerage Sentiment on Hero MotoCorp's Q1 FY25 as EV Losses Offset Gains

• Hero MotoCorp reported a 36% year-on-year increase in Q1 FY25 standalone net profit, totaling ₹1,122.63 crore, though this was below the expected ₹1,190 crore.
• Despite stronger margins in the internal combustion engine (ICE) segment, Hero MotoCorp faced losses in its electric vehicle (EV) segment, alongside lower spare parts sales, contributing to a mixed response from brokerages.

Hero MotoCorp's Q1 FY25 earnings report has sparked mixed reactions from brokerages, reflecting both optimism and concern about the company's future. The world's largest two-wheeler manufacturer reported a 36% year-on-year rise in standalone net profit to ₹1,122.63 crore, slightly below the ₹1,190 crore expected by analysts.

While the company's internal combustion engine (ICE) margins showed improvement, these gains were offset by losses in the electric vehicle (EV) segment and a decline in spare parts sales.

Nomura retained its 'buy' rating, setting a target price of ₹5,663 per share, citing rural revival and the Xtreme 125 as key growth drivers. They anticipate cost reductions in the EV segment to ease pressures in the latter half of FY25 but have adjusted their volume growth forecast to 6% for FY25-26.

Similarly, Bank of America Securities maintained a 'buy' rating but lowered its target price to ₹6,000 per share, emphasizing the importance of market share recovery driven by rural demand and the Xtreme 125.