Hero MotoCorp Limited

HEROMOTOCO.BO•auto-manufacturers

Current Price

5,422.80INR

per share

Fair Value

4,106.32INR

Overvalued

32.1%

Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 9.26%, lower than industry average of 12.70%.

Growth Trajectory

Profitability

In the growth phase company makes 15.36% profit on every dollar of sales, higher than industry average of 6.71%.

Profitability Trajectory

Risk Profile

Investors expect at least 8.10% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)

Return on Invested Capital (%)

Financial Health Overview

Enterprise Value

757.78B INR

Equity Value

821.30B INR

FCF Yield

46.79%

Average ROIC

32.14%

Cost of Capital

8.38%

P/E Ratio

21.79x

Financial Metric	Most Recent 12 months (INR)	Previous Year (INR)
Revenues	402.29B INR	375.99B INR
Operating Income or EBIT	67.26B INR	53.26B INR
Interest Expense	724.60M INR	763.70M INR
Book Value Of Equity	192.72B INR	176.99B INR
Book Value Of Debt	7B INR	6.06B INR
Cash and Marketable Securities	71.88B INR	49.74B INR
Number of Shares Outstanding	200.01M	--
Minority interests	1.36B INR	0 INR
Current Stock Price	5422.80 INR	--
Effective Tax Rate	26.00%	--
Marginal Tax Rate	30.00%	--

Performance vs Industry

Revenue Growth

-5.70%

6.99%Company

12.69%Industry

Below Industry

Operating Margin

+10.01%

16.71%Company

6.70%Industry

Above Industry

Hero MotoCorp Limited demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate

4.65%

Cost of Capital

8.88%

Return on Capital

8.87%

Reinvestment Rate

52.36%

Terminal value represents 60% of total enterprise value, based on 4.65% perpetual growth and 8.88% discount rate.

Equity Value Breakdown

Component	Value	Type
Present Value (Terminal Value)	456.49B INR	Add
Present Value (Cash Flow Over Next 10 Years)	301.29B INR	Add
Value of Operating Assets	757.78B INR	Sub-total
Debt	6.99B INR	Subtract
Minority Interests	1.35B INR	Subtract
Cash	71.87B INR	Add
Value of Equity	821.30B INR	Sub-total
Number of Shares	200.01M shares	Divisor
Estimated Value per Share (Fair Value)	4.10K INR	Total
Current Market Price	5.42K INR	Reference

Financial Projections

Total FCF Present Value

301.29B INR

Avg Revenue Growth

6.90%

Avg Operating Margin

15.05%

Avg ROIC

32.14%

Year	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal Year
REVENUE
Revenue	437.13B INR	477.61B INR	521.84B INR	570.17B INR	622.97B INR	674.92B INR	724.97B INR	772.05B INR	815.07B INR	852.97B INR	892.64B INR
Growth Rate	8.66%	9.26%	9.26%	9.26%	9.26%	8.33%	7.41%	6.49%	5.57%	4.65%	4.65%
PROFITABILITY
Operating Income	73.08B INR	75.51B INR	80.14B INR	84.97B INR	90.01B INR	97.51B INR	104.75B INR	111.55B INR	117.76B INR	123.24B INR	128.97B INR
Operating Margin	16.71%	15.81%	15.35%	14.90%	14.44%	14.44%	14.44%	14.44%	14.44%	14.44%	14.44%
EBIT (1-tax)	54.08B INR	55.88B INR	59.30B INR	62.87B INR	66.60B INR	71.38B INR	75.83B INR	79.87B INR	83.38B INR	86.27B INR	90.28B INR
CASH FLOW
Reinvestment	13.88B INR	15.17B INR	16.57B INR	18.11B INR	17.81B INR	34.34B INR	32.30B INR	29.51B INR	26.00B INR	27.21B INR	47.27B INR
Free Cash Flow	40.19B INR	40.71B INR	42.72B INR	44.76B INR	48.78B INR	37.04B INR	43.53B INR	50.35B INR	57.37B INR	59.05B INR	43.00B INR
Terminal Value	--	--	--	--	--	--	--	--	--	--	1.01T INR
Present Value	37.18B INR	34.83B INR	33.81B INR	32.77B INR	33.04B INR	23.17B INR	25.12B INR	26.76B INR	28.04B INR	26.51B INR	—
EFFICIENCY
ROIC	42.30%	39.42%	37.79%	36.24%	34.76%	34.08%	31.11%	28.93%	27.28%	26.01%	8.87%
Cost of Capital	8.10%	8.10%	8.10%	8.10%	8.10%	8.25%	8.41%	8.56%	8.72%	8.87%	8.88%
Sales/Capital	2.91x	2.91x	2.91x	2.91x	2.91x	1.45x	1.45x	1.45x	1.45x	1.45x	—

Profitability & Efficiency

Operating Margin (%)

ROIC (%)

Value Creation Analysis

ROIC (%)

Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (₹B)

Reinvestment (₹B)