HEROMOTOCO
NIFTY200
Hero MotoCorp Ltd.
Auto · NSE
₹5,322.00
1Y+42.2%
P/E18.6
Fwd P/E16.7
ROE+28.0%
Margin+12.1%
D/E3.57
Div Yld+3.5%
Quality Score74/100
Analyst consensus:Constructive· 33 analysts
52-week range
₹3,609 – ₹6,266
From 52w high
-15.1%
RSI (14)
56.3
vs SMA 50 / 200
↑ 50 · ↓ 200
Hero MotoCorp (HEROMOTOCO) reported record FY2026 revenue and profit with EV and export growth, while trading at a trailing PE of 18.6 — the lowest among its 6-peer Auto sector group where peers range from 21.9 to 37.5. At ₹5,322, the stock is up 42% over 12 months but has pulled back 7.3% in the past 3 months and sits marginally below its 200-DMA of ₹5,334.
Pros
- ✓Lowest trailing PE (18.6) among the 6-stock Auto peer group, where the next closest is M&M at 21.9 and the group high is Eicher Motors at 37.5 — HEROMOTOCO trades at a 37% discount to the peer median PE of approximately 29.
- ✓ROE of 28.0% ranks 2nd among peers with available data (vs BAJAJ-AUTO at 28.1%, M&M at 18.8%, MARUTI at 14.4%), indicating sustained capital efficiency over the measured period.
- ✓Quality score of 69 ranks 1st among all 6 peers (peer range: 31–60), and a consistency score of 77 with ROE above 15% for 4 recorded years and FCF positive for 4 recorded years underpins the quality ranking.
- ✓Dividend yield of 3.48% adds a cash return component; 5-year revenue growth of 30.2% and earnings growth of 25.7% reflect a multi-year track record of compounding at scale.
Cons
- ✗Debt-to-equity of 3.57 is elevated for an Auto OEM and the trend is classified as rising; this increases financial leverage risk, particularly if EV capex continues to scale or if a volume downturn compresses operating cash flows.
- ✗The stock has been trading below or at its 200-DMA of ₹5,334 in the recent period; the 3-month return of -7.28% contrasts with the 12-month return of +42.22%, suggesting momentum has shifted over the shorter horizon.
- ✗Profitability margin at 12.1% is the primary earnings driver, and any compression from rising input costs, EV price competition, or unfavourable currency on exports could disproportionately affect net income given the operating leverage inherent in a high-volume OEM model.
- ✗Analyst coverage of 33 analysts with a mean rating of 2.29 on a 1–5 scale (lower = more constructive) reflects a spread of views; a rating of 2.29 is not uniformly at the constructive end of the scale, indicating meaningful divergence among analysts on the stock's near-term prospects.
Recent context
- ·FY2026 results described in news as record revenue and profit, with scooter, EV, and export segments cited as growth contributors and margin guidance maintained — the headline outcomes align with the strong 5-year earnings CAGR of 25.7% on record.
- ·Motilal Oswal Financial Services (MOFSL) issued a positive rating on HEROMOTOCO in April 2026, citing specific model lines (Splendor, Glamour, Xtreme 125R) in the research note — this is a named-broker action reported in Business Today.
- ·The 3-month price pullback of 7.28% despite strong FY2026 results has reduced the premium to the 52-week high; the stock is now 15.1% below the 52-week high with near-term support levels observed at ₹5,197, ₹4,942, and ₹4,904.
Questions to ask yourself
- ?Does the rising debt-to-equity trend reflect a temporary EV investment cycle or a structural change in the company's capital allocation philosophy, and how does the company's interest coverage look relative to its operating cash flow?
- ?How does the 18.6 trailing PE discount to sector peers hold up on a forward earnings basis — is the lower PE explained by lower expected growth, higher financial risk, or a genuine valuation gap relative to fundamentals?
- ?Given the 3-month price decline following record FY2026 results, what portion of the 12-month gain was driven by earnings re-rating versus broader market sentiment, and does the current price reflect the updated earnings trajectory?
- ?What is the competitive positioning of HEROMOTOCO's EV portfolio relative to peers entering the two-wheeler EV space, and how might pricing pressure or technology shifts in that segment affect the margin guidance the company has maintained?
PE
18.6
Forward PE
16.7
ROE
+28.0%
Profit margin
+12.1%
D/E
3.57
Dividend yield
+3.5%
Quality score
69/100
ROE 5y above 15%
4/5 yrs
FCF 5y positive
4/5 yrs
Analyst consensus2.29 · 33 analysts(1–5 scale, lower = more constructive)
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.Analysis generated 11 May 2026.