Automobiles Modest expectations by Mirae asset sherkhan
Automobile-Dec27_2024 (2).pdf (336.9 KB)
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Whats the RHP filing date for Ather Energy? If I buy Hero Motor today, will I be eligible for share holder quota?
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If Hero Moto corp had done buybacks instead of dividend, I believe they would have generated better wealth, I have done a simple analysis. I may be wrong, and any criticism is welcomed
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Interesting investment by Hero Motocorp in Euler Motors - Hero MotoCorp to invest ₹525 crore in Euler Motors, expands into EV three-wheeler market - CNBC TV18.
I had not heard of this company before. Looks like they make LCVs also besides the three-wheeler. Hero may be struggling in their core two-wheeler market, but they seem to be making thoughtful investments on the EV side. First Ather, and now this one. Of course, they seem to be having other problems currently with a wave of management exits. Remains to be seen if they can get their house in order.
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Hero Motocorp’s May sales figures were a pleasant surprise.
The number one motorcycle manufacturer was able to grow 12% yoy, which is commendable considering the base volume they were sitting on.
Their Exports have jumped 78%, VIDA jumped 166%, Scooter sales more than doubled by 104%.
The issue is not the growth but
- The VIDA EV, Scooters and Export volumes are very low at the moment vs. domestic motorcycle sales. VIDA is selling less than half of TVS and ranked fourth at the moment. This is a problem considering Hero Motocorp has the largest dealer network in the country meaning they are hardly selling VIDA to repeat customers. Exports are promising but need time to contribute considerably. Scooters are a bright spot and will be a force to reckon with once they start doing 100000 units monthly on regular basis.
- Their main volumes are coming from commuter segments. the Premium segments are not selling for two reasons. 1. The Dealership experience is bad for premium products, even at Premia outlets. Those looking to buy the Karimza XMR, Xpulse and Xtreme 250R which are high margin products just settle with alternative options. Hero sold 6 units of Karizma and 8 units of the xtreme 250. Here are the links to various dealership experiences.
https://www.reddit.com/r/indianbikes/comments/1t2cdug/hero_makes_great_bikes_but_their_dealers_are/
https://www.reddit.com/r/indianbikes/comments/1toa00p/hero_premias_bs/
Additionally, the premium market has moved onwards to 350cc plus, this means Hero needs to push the 440cc models before the 250cc if it wants to catch the premiumization wave.
- I know Hero failed with EBR bankruptcy and they have tied up with harley Davidson, but they should desperately look to acquire a premium brand like how Bajaj is working with KTM and Triumph and TVS took over Norton.
Unless Hero Motocorp addresses these three pain points, I see TVS overtaking everyone including Honda and becoming no.1 soon.
Disclosure: hold tracking quantities and follow the motorcycle market out of passion. No buy,sell or hold recommendation.
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