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Hero MotoCorp shares rise over 4% as firm inks distribution deal with Harley-Davidson

Hero MotoCorp stock price has risen 20% since the beginning of the year. Market capitalisation of the firm stood at Rs 58,981 crore as of today's session.

twitter-logoBusinessToday.In | October 28, 2020 | Updated 17:00 IST
Hero MotoCorp shares rise over 4% as firm inks distribution deal with Harley-Davidson
The company also plans to post its Sept quarterly results, scheduled to be released later in the day

Hero MotoCorp shares rose 4% on Wednesday after the company announced distribution agreement with Harley-Davidson for the Indian market.

The two-wheeler manufacturer said it would service and sell parts and accessories and general merchandise riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero's existing dealership network in India.

The agreement comes under the backdrop of Harley announcing its business overhaul actions under 'The Rewire' plan on September to change its business model in India.

The company also plans to post its Sept quarterly results, scheduled to be released later in the day.

Share price of Hero MotoCorp opened with a gain of 2.55% at Rs 2,987 and later touched an intraday high of Rs 3,034.5, rising 4.18% compared to the earlier closing of Rs 2,912.70 on BSE.

Hero MotoCorp stock has gained 1.62% in the last 2 sessions. Hero MotoCorp share price stands higher than 100 and 200-day moving averages but lower than 5, 20 and 50-day moving averages.

Hero MotoCorp stock price has risen 20% since the beginning of the year. Market capitalisation of the firm stood at Rs 58,981 crore as of today's session.

On Hero Motocorp's Q2FY21 expectations, HDFC Securities in its note said," Net sales of the company is expected to increase by ~25% YoY to Rs 9440 crore on 7% increase in volumes to 18.1 lakh units. EBITDA margins are likely to come in at 12.8% (-175bps YoY) vs 3.6% QoQ. Net profit is expected to be flat YoY at Rs 920cr vs Rs 61cr QoQ. Market share trends in the premium segment post the launch of the Xtreme 160cc, festive season expectations and current inventory levels would be key monitorables."

Emkay brokerage said it expects Hero MotoCorp's revenue to grow 25.7% on YoY basis to Rs 9,518.1 crore from Rs 7,570.7 crore reported in the year-ago quarter, owing to increase in realisation. The realisation, meanwhile, is expected to increase due to BS-VI launches and price hikes. Company's earnings before interest, tax, depreciation, and ammortisation (Ebitda) is seen rising 20 per cent YoY to Rs 1,321.4 crore.

BP Wealth expects building 24.2% YoY growth in Hero MotoCorp's Q2 revenues at Rs 9,400 crore, led by strong volume growth. Ebitda margins are expected to remain flat on a YoY basis, driven by cost-saving and higher operating leverage. Net profit is seen increasing by 10.7% YoY to Rs 1,010 crore.

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