Two-wheelers major Hero Honda witnessed hectic activity today. On the BSE, the stock rose by 3.33 per cent to a high of Rs 279, but ended at Rs 266.85, down 1.20 per cent from yesterday's close. Around 81,142 shares changed hands.
A dealer at a local brokerage said, "Hero Honda's rise today is purely on backing from operators. The stock had been battered in the last few sessions on growth concerns."
"Technically, the stock is considered attractive at the current level and investors could get some good yield in the short term."
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Another dealer, however, said the scrip has been pushed up by expectations of impressive vehicle sales during September 2002.
A sector analyst said in the wake of concerns over the growth momentum in the two-wheelers sector, Hero Honda comes out as the best bet. It has a strong foothold in northern India and is slowly gaining ground in western as well as southern markets. The company is known to be an aggressive seller. This enables the company to target a wider audience.
One hurdle that the company faces is the fact that it is not as cash-rich as rival Bajaj Auto. Consequently, aggressive discounts by Bajaj Auto at the dealer level and retail level could hurt Hero Honda badly.
Hero Honda's August 2002 motorcycle sales jumped 26.6 per centcompared with that of a year ago, led by its 100 cc Passion model.
The company sold 1,37,264 motorcycles last month compared with 1,08,369 in August 2001.
However, month-on-month sales rose marginally by 0.7 per cent, from 1.36 lakh units in July 2002. For the financial year 2002-03, the company has set a sales target of 18 lakh bikes, a 26 per cent growth compared with 14.25 lakh bikes that were sold in the financial year 2001-02.