InCred Equities - Hero MotoCorp

	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Revenue (Rsm)	407,564	450,357	500,407	557,917
Operating EBITDA (Rsm)	58,677	64,982	71,178	79,202
Net Profit (Rsm)	46,099	51,021	55,964	62,214
Core EPS (Rs)	230.6	255.1	279.8	311.1
Core EPS Growth	11.6%	10.6%	9.7%	11.2%
FD Core P/E (x)	22.99	20.78	18.95	17.04
DPS (Rs)	165.1	180.2	200.3	220.3
Dividend Yield	3.11%	3.39%	3.77%	4.15%
EV/EBITDA (x)	15.46	13.86	12.43	11.01
P/FCFE (x)	41.84	30.06	23.22	22.61
Net Gearing	(77.1%)	(75.0%)	(76.6%)	(76.2%)
P/BV (x)	5.35	4.98	4.63	4.29
ROE	24.4%	24.8%	25.3%	26.1%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Total Net Revenues	407,564	450,357	500,407	557,917
Gross Profit	110,924	120,139	132,802	147,409
Operating EBITDA	58,677	64,982	71,178	79,202
Depreciation And Amortisation	(7,759)	(8,581)	(8,993)	(9,443)
Operating EBIT	50,918	56,402	62,185	69,758
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	10,360	11,626	12,434	13,193
Profit Before Tax (pre-EI)	61,278	68,028	74,619	82,952
Exceptional Items
Pre-tax Profit	61,278	68,028	74,619	82,952
Taxation	(15,179)	(17,007)	(18,655)	(20,738)
Exceptional Income - post-tax
Profit After Tax	46,099	51,021	55,964	62,214
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	46,099	51,021	55,964	62,214
Recurring Net Profit	46,099	51,021	55,964	62,214
Fully Diluted Recurring Net Profit	46,099	51,021	55,964	62,214

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
EBITDA	58,677	64,982	71,178	79,202
Cash Flow from Invt. & Assoc.
Change In Working Capital	(9,469)	(2,722)	(97)	(5,267)
(Incr)/Decr in Total Provisions	8,965	(4,542)	(200)	(500)
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received	10,360	11,626	12,434	13,193
Tax Paid	(14,431)	(17,007)	(18,655)	(20,738)
Cashflow From Operations	54,102	52,338	64,660	65,890
Capex	(10,533)	(9,068)	(9,000)	(9,000)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow	(18,235)	(8,000)	(10,000)	(10,000)
Cash Flow From Investing	(28,768)	(17,068)	(19,000)	(19,000)
Debt Raised/(repaid)
Proceeds From Issue Of Shares	0
Shares Repurchased
Dividends Paid	(32,975)	(35,982)	(40,000)	(44,000)
Preferred Dividends
Other Financing Cashflow	2
Cash Flow From Financing	(32,974)	(35,982)	(40,000)	(44,000)
Total Cash Generated	(7,639)	(712)	5,660	2,890
Free Cashflow To Equity	25,334	35,270	45,660	46,890
Free Cashflow To Firm	25,334	35,270	45,660	46,890

(Rs mn)	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Total Cash And Equivalents	152,627	159,915	175,575	188,465
Total Debtors	36,744	39,483	42,500	48,913
Inventories	14,576	18,508	20,565	22,928
Total Other Current Assets	9,333	12,000	13,500	15,000
Total Current Assets	213,281	229,906	252,140	275,307
Fixed Assets	65,507	64,426	64,433	63,990
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets	65,507	64,426	64,433	63,990
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors	55,661	59,610	64,587	68,096
Other Current Liabilities	20,375	18,500	19,800	20,800
Total Current Liabilities	76,037	78,110	84,387	88,896
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions	3,115	3,115	3,115	3,115
Total Liabilities	79,151	81,225	87,501	92,011
Shareholders Equity	198,069	213,108	229,072	247,286
Minority Interests
Total Equity	198,069	213,108	229,072	247,286

	Mar-25A	Mar-26F	Mar-27F	Mar-28F
Revenue Growth	8.8%	10.5%	11.1%	11.5%
Operating EBITDA Growth	11.6%	10.7%	9.5%	11.3%
Operating EBITDA Margin	14.4%	14.4%	14.2%	14.2%
Net Cash Per Share (Rs)	763.14	799.58	877.88	942.33
BVPS (Rs)	990.34	1,065.54	1,145.36	1,236.43
Gross Interest Cover
Effective Tax Rate	24.8%	25.0%	25.0%	25.0%
Net Dividend Payout Ratio	71.5%	70.5%	71.5%	70.7%
Accounts Receivables Days	28.56	30.89	29.90	29.90
Inventory Days	17.85	18.28	19.40	19.34
Accounts Payables Days	68.25	63.71	61.66	58.99
ROIC (%)	81.1%	84.4%	82.8%	92.4%
ROCE (%)	31.8%	32.6%	33.3%	34.4%
Return On Average Assets	17.2%	17.8%	18.3%	19.0%

(91) 22 4161 1541 pramod.amthe@incredresearch.com

(91) 22 4161 1552 ravi.gupta@incredresearch.com

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Market Data

Source: Bloomberg