It’s not just Ather but also Hero financial services that contributes to book value but it’s not reported in their balance sheet.
On their core business stock is the cheapest in peer group and with new management showing intent to move up value chain and exports picking up handsomely, there is a plenty to hope for in this stock.
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All I can say is I would have more confidence in their Premium segment strategy than their electric segment strategy. Whether Premium segment bears fruit outside of Harley we should know in the next year.
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I agree with you. EVs work better on scooters than bikes simply due to space constraints and that’s where TVS will have some advantage there.
Street didn’t like the results due to miss on all the parameters. Hero management is always gungho about the company in all their communications and concall and their frequent hits and misses on results (both sales and financial) have eroded their credibility.
If you listen to their concalls or management interviews they can’t seem to give simple and straight answer to easy questions without using bromides like “our brand is strong, our portfolio is strong, our network is strong…”
On the recent call concall, the management sounded very evasive while answering questions on quarter on quarter reduction in average selling price.
Compare this with Bajaj where their management is always balanced in their commentary is not afraid to share bad news.
Given continuous loss of market share in all the categories, Hero’s management at some time will have to address the elephant in the room instead of just hiding behind the clichés and past glory.
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There was no discussion in the concall regarding listing or performance of Hero Fincorp or performance of Ather. Also, should they not highlight the path to profitability for Ather as well?
Their appropriation of ICE margin towards their EV operations also doesn’t count their time to time investments in Ather, which I think practically is also part of their EV operations only in the long run.
I think as per this webpage (not sure about the reliability of this data) valuation of their equity stake in HeroFincorp could be worth more than Rs 10,000 crores (BV is only Rs 1469 crs). Fincorp has also filed its DHRP on 31st July.
Disclosure : Invested
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I think Hero motors along with TVS and Bajaj Auto are poised for growth.
One the Ola electric hype crosses consumers will begin to demand quality and longevity. And existing players have more experience and a far better management than up and coming player(s).
Could you maybe share your worksheet on DCF for hero motors.
Seeking to learn.
Ola base Warranty covers the battery for a period of 8 years or 80,000 kms whichever comes first. They are confident of their quality.
Or are they covering up for the very mediocre quality and build issues.
People are a lot less concerned about the issues and brand will get less hit when the issues are covered by waranty.
Ola is a new entrant and disruptor in 2 wheeler mkt. There will be hiccups initially but how they navigate this teething period is important. So far it looks like they’re managing well. The problem with incumbent players is, their EV is cannibalising their own petrol 2 wheelers while Ola doesn’t have this problem and eating away everyone’s mkt share.
A little dated article showing Ola outselling the next 2 large players combined:
Whilst I agree largely to what you’ve said, I see certain issues.
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Company doesn’t seem to focus on the issues it has. Rather focus is bringing new sales. Ola E is often compared with Tesla. How both have build issues… But if we see the latest versions of Model Y, there is a significant improvement. I don’t see this attitude of improvement from Ola mgmt.
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You’ve pointed out the OLA E has outperformed legacy 2W in EV sales. Imho, the first mover advantage is very slim in the 2W EV segment. Legacy makers will rush in with massive pockets and flood the market. So it’s only a matter of time, before we see Sales decline for OLA. As we witnessed for Tesla.
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Mgmt team and leadership aren’t focusing on the right place. Marketing is not their role. Let the marketing team and leadership do that.
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As for ICE being cannibalised… Let’s take a look at Ford F150.
The change was smooth. Not complete yet. I think it’ll be a balancing game. Net sales figures may not be amazing for these legacy companies. But revenue as a whole will increase at their standard pace. EV 2W will replace existing models in their own forte. Like- family focused ICE replaced by family focused EV.
I won’t be very sure about that. Bhavesh Agarwal is up against the best, of the 2-wheeler industry, who have bootstrapped themselves to become among the best in the world. They have the kind of management quality, deeper cashflows, and R&D firepower which Ola doesn’t have yet, relying purely on debt and a very benevolent capital market to fund their expansion. God forbid if there happens to be a price war in 2-wheeler EV space, I won’t count on Ola to survive that.
Whether Ola has got a secret sauce in the product, the answer is NO. So far based on the channel checks and having heard feedback from different sources there is really not much to choose between different EV bikes of Ola, Hero, TVS etc. So it’s not as if Ola is making a superior product.
Below is a recent interview from Rajiv Bajaj with his trademark candor and insightful commentary. At some point he makes a note that Ola is losing its market share which to me is not surprising.
Overall I don’t think Ola has any advantage over the ICE 2-wheeler incumbents and they will have to try really hard to succeed in this space.
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I think this ola frenzy is not going to be sustainable. Read few reports and little scuttlebut here and there and found there are many issues with ola 2 wheelers which they are not being able to address as they don’t have reach and touchpoints like hero or bajaj or trained skilled personnel for R&M.
I think its more like being playing on EV mania. India runs on oil and it will continue to do so for long time. Many issues with EVs will surface within next few years as it has just begun. If EV is really disruptive as being proposed then current market leaders with heavy cash chest would have already done it by now. Further EV materials dumping from china will be huge then.
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I had once compared Hero with Bajaj…and found Bajaj B/S way more stronger than Hero. there is a difference in focus in terms of market segments and that has made Bajaj a stronger player, it may not be selling the most vehicles but makes the most money in its industry.
One of the bigger issues to come up with EVs, in my opinion, is when the battery will need to be replaced.
Just imagine, you have an 8 year old 2W, would you be willing to spend ₹30k-50k on new battery?
Instead, I would buy a new EV for ₹100k than spending ₹30-40k on an old scooter.
Which practically means the life of an EV gets reduced drastically to only 8 years compared to 15-20 years for ICE vehicles. That proposition is a big dampener and value-destructive from customer point of view.
I still feel people buying EVs don’t understand the above maths.
Only solution to the above issue would be drastic fall in prices of batteries, say, within 5 years.
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Hero MotoCorp registered a month-on-month growth of 38% in its overall dispatch volumes and has sold 24,17,790 units in FY’25 (Apr-Aug), a growth of 8% over the corresponding period of FY’24.
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Again not very impressive number given stellar numbers posted by Bajaj and TVS. Hero management has been citing supply constraints for last two quarters to explain the reason for muted sales growth. But I stopped believing them a long time ago given their history of not delivering on their promises. Let’s hope such performances are temporary and not indicative of something more structural happening.