InCred Equities - Hero MotoCorp

	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Revenue (Rsm)	372,283	410,762	465,814	517,252
Operating EBITDA (Rsm)	50,283	59,549	68,624	75,603
Net Profit (Rsm)	39,006	47,347	54,020	58,930
Core EPS (Rs)	195.2	236.9	270.2	294.8
Core EPS Growth	33.8%	21.4%	14.1%	9.1%
FD Core P/E (x)	19.39	15.98	14.00	12.84
DPS (Rs)	140.1	160.1	180.2	200.2
Dividend Yield	3.70%	4.23%	4.76%	5.29%
EV/EBITDA (x)	12.32	10.40	8.83	7.83
P/FCFE (x)	27.78	26.96	18.15	17.31
Net Gearing	(76.1%)	(70.2%)	(70.7%)	(70.8%)
P/BV (x)	4.21	3.87	3.55	3.26
ROE	22.5%	25.2%	26.4%	26.5%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Total Net Revenues	372,283	410,762	465,814	517,252
Gross Profit	93,952	111,079	125,186	138,273
Operating EBITDA	50,283	59,549	68,624	75,603
Depreciation And Amortisation	(7,114)	(7,817)	(8,581)	(8,993)
Operating EBIT	43,169	51,731	60,043	66,610
Financial Income/(Expense)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	8,741	11,398	11,983	11,963
Profit Before Tax (pre-EI)	51,910	63,129	72,026	78,574
Exceptional Items
Pre-tax Profit	51,910	63,129	72,026	78,574
Taxation	(12,904)	(15,782)	(18,007)	(19,643)
Exceptional Income - post-tax
Profit After Tax	39,006	47,347	54,020	58,930
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	39,006	47,347	54,020	58,930
Recurring Net Profit	39,006	47,347	54,020	58,930
Fully Diluted Recurring Net Profit	39,006	47,347	54,020	58,930

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
EBITDA	50,283	59,549	68,624	75,603
Cash Flow from Invt. & Assoc.
Change In Working Capital	9,088	(13,033)	(2,614)	(3,332)
(Incr)/Decr in Total Provisions	2,092	(77)	(2,800)	(1,900)
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received	8,741	11,398	11,983	11,963
Tax Paid	(12,610)	(15,782)	(18,007)	(19,643)
Cashflow From Operations	57,595	42,055	57,186	62,691
Capex	(8,007)	(10,000)	(7,500)	(9,000)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow	(22,357)	(4,000)	(8,000)	(10,000)
Cash Flow From Investing	(30,365)	(14,000)	(15,500)	(19,000)
Debt Raised/(repaid)
Proceeds From Issue Of Shares	0
Shares Repurchased
Dividends Paid	(27,972)	(31,976)	(35,982)	(39,980)
Preferred Dividends
Other Financing Cashflow	1,101	2
Cash Flow From Financing	(26,871)	(31,975)	(35,982)	(39,980)
Total Cash Generated	359	(3,920)	5,704	3,711
Free Cashflow To Equity	27,230	28,055	41,686	43,691
Free Cashflow To Firm	27,230	28,055	41,686	43,691

(Rs mn)	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Total Cash And Equivalents	136,951	137,029	150,734	164,445
Total Debtors	27,034	33,761	38,286	43,931
Inventories	14,438	18,006	21,695	24,091
Total Other Current Assets	14,147	15,000	18,500	21,000
Total Current Assets	192,570	203,797	229,215	253,467
Fixed Assets	63,145	65,328	64,247	64,254
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets	63,145	65,328	64,247	64,254
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors	55,282	52,544	58,144	62,852
Other Current Liabilities	16,224	17,000	17,700	18,300
Total Current Liabilities	71,506	69,544	75,844	81,152
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions	4,348	4,348	4,348	4,348
Total Liabilities	75,854	73,892	80,192	85,501
Shareholders Equity	179,862	195,233	213,271	232,221
Minority Interests
Total Equity	179,862	195,233	213,271	232,221

	Mar-24A	Mar-25F	Mar-26F	Mar-27F
Revenue Growth	10.1%	10.3%	13.4%	11.0%
Operating EBITDA Growth	26.0%	18.4%	15.2%	10.2%
Operating EBITDA Margin	13.5%	14.5%	14.7%	14.6%
Net Cash Per Share (Rs)	685.10	685.49	754.05	822.64
BVPS (Rs)	899.76	976.65	1,066.89	1,161.69
Gross Interest Cover
Effective Tax Rate	24.9%	25.0%	25.0%	25.0%
Net Dividend Payout Ratio	71.7%	67.5%	66.6%	67.8%
Accounts Receivables Days	26.97	27.01	28.23	29.01
Inventory Days	18.87	19.76	21.27	22.05
Accounts Payables Days	67.09	65.66	59.30	58.27
ROIC (%)	56.4%	82.1%	72.0%	74.7%
ROCE (%)	29.2%	32.9%	34.5%	34.6%
Return On Average Assets	16.0%	18.0%	19.2%	19.3%

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

(91) 02241611552 ravi.gupta@incredresearch.com

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Market Data

Source: Bloomberg