Hero MotoCorp rallies 4%; company announces price hike from July 1

The company said the price revision has been necessitated to partially offset the steadily growing overall cost inflation, including commodity prices

Shares of Hero MotoCorp were up 4 per cent at Rs 2,767 on the BSE in Friday's intra-day trade after the auto major said it will increase ex-showroom prices of its motorcycles and scooters with effect from July 1 to partially offset the steadily growing input cost inflation. In comparison, the S&P BSE Sensex was up 0.6 per cent at 52,577 at 10:26 AM.

The stock of two/ three-wheeler maker quoted higher for the fourth straight trading day, and has rallied 13 per cent during the period. With the recent run-up, the stock has recovered 29 per cent from its 52-week low of Rs 2,148, touched on March 8, 2022. The stock had hit a 52-week high of Rs 2,980 on July 2, 2021.

"Hero MotoCorp will make an upward revision in the ex-showroom prices of its motorcycles and scooters, with effect from July 1, 2022. The price revision will be up to Rs 3000. The exact quantum of increase will be subject to the specific model and market," the company said in an exchange filing on Thursday after market hours.

The price revision has been necessitated to partially offset the steadily growing overall cost inflation, including commodity prices, the company said.

In a separate filing on Tuesday, Hero MotoCorp, the world's largest manufacturer of motorcycles and scooters, announced the introduction of Euro-5 compliant variants of its three globally popular products in Turkiye.

Management expects the 2W industry to post double-digit growth in FY23 on the back of favourable indicators that include marriage season demand, good festive demand in key regions in April, and positive rural sentiment on the back of healthy crop output.

"We expect Hero MotoCorp to gradually recover its lost market share in motorcycles over the next 2-3 years, led by gradual economic recovery driving consumption from the mid-to-low income consumers – a key segment for the company and revival in rural economy," analysts at HDFC Securities said.

Technical View

Bias: Positive

Upside: Rs 2,838

Support: Rs 2,585

The stock has rallied 13 per cent, from a low of Rs 2,434, in the last four trading sessions. With this, the stock is currently trading firmly above all its key moving averages.

Hero MotoCorp is also one of few stocks to trade with a positive bias on the price-to-moving average basis. The weekly charts indicate that the stock has a trend-line resistance around Rs 2,760, above which it can spurt towards the 100-WMA placed at Rs 2,838.

Select momentum oscillators on the daily charts, mainly the MACD (Moving Average Convergence-Divergence), the DI (Directional Index), Slow Stochastic and the 14-day RSI (Relative Strength Index) favour the bulls.

The broader trend suggests that in case of a corrective move the stock may seek support around Rs 2,585-level.

(With inputs from Rex Cano)