MARKET EYE-BoFA downgrades Hero MotoCorp; cuts target to 1,650 rupees

Tue Dec 4, 2012 10:08am IST

Related Topics

Stocks

   

* Bank of America Merrill Lynch downgrades Hero MotoCorp
 to "underperform" from "buy" and cuts its target price
to 1,650 rupees from 1,980 rupees.
* The bank expects the company's domestic sales to remain muted
and in 'single digits.' This is primarily due to heavy
dependence on 100cc bikes where better options are available
with competitors, and likely structural shift to 150cc plus
premium bikes where the "company's franchise is weak".
* "We cut our export assumptions by 40 percent/year to factor in
the six-month delay in its overseas foray," BofA said in a note.
* It expects Hero MotoCorp's margin expansion to be muted, cuts
EBITDA margin assumptions by 70bp/year to 11.4/13.1 percent to
factor peer pressures, and rupee weakness that will hurt
imports.
* At 0436 GMT, shares were down 0.72 percent at 1,808.05 rupees.

 (manoj.dharra@thomsonreuters.com)
FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage