Hero MotoCorp Ltd.’s share price has come under pressure following a downgrade from UBS, which reiterated a “Sell” rating on the stock, citing significant challenges ahead for the automotive giant. The stock was down more than 2% in early trade on Friday.
In its analysis, UBS emphasised that the market’s optimistic view of Hero MotoCorp as a rural proxy is misplaced. While there are expectations of a revival in demand for commuter motorcycles, the brokerage pointed out rising competition and a shift towards electrification, premiumisation, and scooters as looming threats. UBS forecasts Hero MotoCorp’s FY27 net profit to be 18% below consensus estimates, further compounding concerns over the company’s long-term growth prospects.
Key highlights from UBS’s report indicate that a staggering 77% of Hero’s volume stems from domestic commuter motorcycles (100-110cc), predominantly concentrated in just five states. This narrow focus leaves the company vulnerable, especially as it faces market share erosion in a rapidly evolving landscape dominated by competitors like TVS and Honda, as well as the rising popularity of electric vehicles (EVs).
Content retrieved from: https://www.ndtvprofit.com/markets/hero-motocorp-share-price-tumbles-following-downgrade-by-ubs.
