At a Glance
Hero MotoCorp is no longer just the “Desh Ki Dhadkan.” With a juicy 3.8% dividend yield, rising margins, and a quiet shift toward premium + EVs, it’s the uncle in the kurta who’s now bench pressing at Cult. But with sales growth barely beating inflation, can Hero win the next lap?
1. 🔧 Business Model: From Hero Honda to Hero Everything?
- 🛵 Core strength: Budget-friendly bikes like Splendor, Passion, HF Deluxe (still 70%+ of volumes)
- 💥 Premium push: Karizma XMR, Harley-Davidson X440 (JV), Mavrick 440 – contributing ~25% of revenue in FY24
- 🔋 EV Gamble: VIDA V1 scooter + new Battery-as-a-Service model launching July 2025
- 🌍 Exports growing slowly but steadily (~4% of revenues)
It’s still a volume-driven business, but the margin narrative is shifting.
2. 💸 Financials: Dividends, Margins, and Slightly Sexy Numbers
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 30,959 | 29,551 | 34,158 | 37,789 | 40,923 |
| Net Profit (₹ Cr) | 2,936 | 2,329 | 2,800 | 3,742 | 4,376 |
| EPS (₹) | 146.05 | 115.95 | 140.61 | 187.31 | 218.91 |
| Dividend Yield | 4.5% | 4.3% | 3.6% | 3.8% | 3.84% |
| ROE | 18% | 16% | 24% | 29% | 24% |
📈 3-Year Profit CAGR: 25%
🎯 EBITDA Margin: 14% (vs 11% in FY22)
💰 Debt: Almost Nil
🔥 Cash: ₹14,384 Cr investments on books
Yes, Hero’s still your rich uncle with fixed deposits and a Karizma.
3. 📊 Quarterly Track: Boringly Profitable (But That’s Good!)
| Quarter | Sales (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) |
|---|---|---|---|
| Jun ’24 | ₹10,211 | ₹1,032 | ₹52.31 |
| Sep ’24 | ₹10,483 | ₹1,066 | ₹53.19 |
| Dec ’24 | ₹10,260 | ₹1,108 | ₹55.38 |
| Mar ’25 | ₹9,970 | ₹1,169 | ₹58.06 |
💡 Hero is consistently churning ₹1,000+ Cr profit every quarter. You may sleep in peace.
4. ⚔️ Peers: The Battle of the Bikes
| Company | Price (₹) | P/E | ROCE | Net Profit (Qtr) | Dividend Yield |
|---|---|---|---|---|---|
| Hero MotoCorp | ₹4,292 | 19.6 | 31.2% | ₹1,169 Cr | 3.84% ✅ |
| Bajaj Auto | ₹8,377 | 31.9 | 28.1% | ₹1,801 Cr | 2.51% |
| Eicher Motors | ₹5,629 | 32.6 | 29.8% | ₹1,362 Cr | 0.91% |
| TVS Motor | ₹2,837 | 61.0 | 19.4% | ₹698 Cr | 0.35% |
🤔 Hero may not be the growth rocket TVS is, but it gives better margins, higher dividend, and lower P/E.
5. 🧾 Red Flags? Sort Of…
- 📉 Sales CAGR (5Y): just 7%
- 📉 1-year stock performance: -22%
- 💤 Premium segment still contributes <30% of volumes
- 🧪 VIDA EV hasn’t yet dented the market like Ola/Ather
- 👴 Brand still seen as “dad’s bike” – not cool enough for Gen Z?
But when you have ₹14,000 Cr cash, you can afford to be a slow biker.
6. 🔮 Fair Value: What’s Hero Worth?
Let’s break it down:
- FY25 EPS: ₹219
- Fair P/E Range: 20–23x (conservative due to growth lag)
- 🧮 FV Range = ₹4,380 – ₹5,040
📌 At CMP ₹4,292 – the stock is fairly valued at lower end, but with 4% yield baked in.
Hero is not for the adrenaline junkies. It’s for investors who like:
- 💰 Cash
- 🛵 Stability
- 🏦 Bonus dividend vibes
🏁 TL;DR — Should You Ride Hero?
- 🧑💼 Stable cash cow – strong margins, great ROE, massive cash pile
- 🚀 Premium + EV push could finally unlock re-rating
- 📉 But low sales growth keeps the excitement in check
- 💸 Fair value range ₹4,380–₹5,040. At CMP, risk-reward is balanced with yield as cushion
✅ Buy if:
- You want consistent dividends + optional EV upside
- You like investing in giants with cash instead of hype
- You think Karizma 2.0 will trigger midlife crises nationwide
❌ Skip if:
- You want growth like TVS, or cool factor like RE
- You believe EVs are the only future – and Hero’s too late to the party
✍️ Written by Prashant | 📅 June 25, 2025
🏷️ hero motocorp, karizma xmr, vida ev, bajaj auto, dividend stocks, motorcycle stocks, eduinvesting
