Hero MotoCorp reports better-than-expected Q3 show: Should you buy, hold or sell its shares?

Shares of the two-wheeler major Hero MotoCorp are in focus in Friday's session (February 7) after the company revealed its third-quarter earnings for the current fiscal year post-market hours on the previous day. The automobile company, whose popular motorcycles include Splendor Plus, Passion Plus and Xtreme, reported a 12 percent rise in net profit at Rs 1,203 crore for the review quarter, thus beating estimates. It reported a net profit of Rs 1,073 crore in the year-ago period.

Revenue from operations during the December quarter came in at Rs 10,211 crore as against Rs 9,724 crore, marking a 5 per cent growth over the corresponding quarter of the previous fiscal.

Further, on the operational front, the company reported Rs 1,476 crore in EBITDA during the review quarter, a growth of 8 per cent year-on-year.

Hero MotoCorp Q3 sales volume

Sales at the world's largest manufacturer of motorcycles and scooters remained more or less steady during the December quarter with sales of 14.64 lakh units of motorcycles and scooters in Q3FY25 as against 14.6 lakh units in Q3FY24.

Vivek Anand, Chief Financial Officer (CFO), Hero MotoCorp, said, “The performance in this quarter and fiscal year, reflects the successful execution of our strategic priorities. Demonstrating strong year-to-date results in both top-line and bottom-line growth, we have achieved the highest-ever nine-month revenue and profits."

Should you buy, sell or hold Hero MotoCorp shares post Q3FY25 show?

Citi has continued with its 'buy' call on the stock with the target price slashed to Rs 5,400 from the earlier Rs 6,300 per share. As per the brokerage, the company's Q3 performance was ahead of estimates on the back of steady margins and a positive outlook for rural demand. Further, the brokerage pointed out that the company's market share could continue to face pressure as the competitive landscape remains challenging. Likewise, the brokerage has slashed its volume forecasts by 4 per cent over FY25-27. 

Morgan Stanley, meanwhile, remains 'underweight' on the stock with the target pegged at Rs 4,110 per share.