Hero Motocorp (HMCL IN) – Q3FY26 Result Update – Ample scope for growth despite uncertainties – Accumulate
Published on 06 Feb 2026
HMCL’s Q3FY26 standalone op revenue and adj PAT modestly beat street estimates (in line with PLe), while gross margin was dragged by commodity inflation and INR depreciation. However, the company has mitigation levers in place to further minimize the impact and sees headroom for growth opportunities in scooters, premium motorcycles, EVs, global market, and PAM business with focus on supply chain and capacity increase amidst global uncertainties. We estimate volume/ realization CAGR of 6.0%/3.2% over FY25-28E translating to revenue/EBITDA/APAT CAGR of 9.5%/10.7%/10.0%. Retain ‘Accumulate’ rating with TP of Rs6,575 (previous Rs6,620). We value the core business at 21x P/E Sep’27E and its stake in Hero Fincorp at Rs50 and Ather Energy at Rs300.
