Hero MotoCorp Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Hero MotoCorp Ltd trades at ₹5,386, in a downtrend and 12 weeks into that stage. That is +4.6% against its own 200-day average. It sits at 36% of a 52-week range of ₹4,835 to ₹6,351. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 2 straight weeks.

Today the stock is in a downtrend — week 12 of stage 4, confirmed. At ₹5,386 it trades +4.6% versus its 200-day average and sits at 36% of its 52-week range (₹4,835–₹6,351).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +91% while the NIFTY 500 moved +276% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 2 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Hero MotoCorp Ltd trades at 18.8× P/E, near the bottom of its own range — cheaper only 35% of the time. Its long-run median P/E is 20.4×, measured across 10.4 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 18.8× is near the bottom of its own range — cheaper only 35% of the time, against a long-run median of 20.4× measured over 10.4 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +31.1% against a +24.9% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +14.3%/yr price move, ~+15.5%/yr came from earnings growth and ~−1.2 pp from the multiple (compressing); over 10y, of the +5.3%/yr price move, ~+9.8%/yr came from earnings growth and ~−4.5 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is low against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Hero MotoCorp Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 33.8% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

69.5/100 — rank 1 of 8 in Auto - 2 & 3 Wheelers · 90% evidence confidence

Hero MotoCorp Ltd scores 69.5 out of 100 against the 8 companies it is compared with in Auto - 2 & 3 Wheelers, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 19.2 + 21.4 + 19.6 + 9.3 = 69.5. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Hero MotoCorp Ltd reported ₹12,978 Cr of revenue in the Mar 26 quarter, +30.2% year on year. That is the 3rd straight quarter of year-on-year growth. Over 10 years it has compounded at 5.2% a year. The last full year, FY26, came in at ₹47,411 Cr. The last four reported quarters add to ₹47,411 Cr.

FY26 revenue came in at ₹47,411 Cr (+15.9% on the year), capping 10 years at 5.2% compound. The latest quarter (Mar 26) printed ₹12,978 Cr, +30.2% year on year — the 3rd consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +15.9% growth against the decade's 5.2% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +15.9% over the last 4 quarters against +12.0%/yr over the last 8 — accelerating; TTM profit +32.0% vs +24.2%/yr — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Hero MotoCorp Ltd's operating margin is 14.0% in the Mar 26 quarter, +0.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 11.0% to 16.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 14.0%, +0.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 11.0%–16.0%.

Why the margin moved: operating margin went +0.0 pp year on year while gross margin went −3.5 pp — the gain came mostly from the gross line: input costs and pricing.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Hero MotoCorp Ltd earned ₹1,474 Cr of net profit in the Mar 26 quarter, +26.1% year on year. It is the 12th consecutive quarter of growth. Full-year FY26 profit was ₹5,776 Cr. The 10-year compound rate is 6.4%. That is 11.4% of the quarter's revenue. The same quarter a year earlier earned ₹1,169 Cr.

Mar 26 profit was ₹1,474 Cr, +26.1% year on year — the 12th consecutive quarter of growth. On the full year, FY26 printed ₹5,776 Cr (+32.0%), and the 10-year compound rate is 6.4%.

Why profit moved: revenue contributed +30.2% and the margin +0.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +32.6% vs revenue +15.9%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 126% of Hero MotoCorp Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹8,315 Cr of operating cash against ₹5,776 Cr of profit. After ₹1,224 Cr of capital spending, ₹7,091 Cr was left as free cash.

FY26: operating cash of ₹8,315 Cr against reported profit of ₹5,776 Cr, leaving free cash of ₹7,091 Cr after ₹1,224 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 126% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 126%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: no single sink dominates — the next section checks both the working-capital cycle and the capital spending.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Hero MotoCorp Ltd's cash conversion cycle runs −40 days in FY26, down from −32 days in FY21. Capital spending ran ₹2,963 Cr over the last 3 years. At FY26 sales of ₹47,411 Cr each day of that cycle holds about ₹130 Cr, so roughly ₹−5,196 Cr sits inside the business at any moment.

FY26: debtors at 18 days, inventory at 31 days — roughly 1.0 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −40 days, tighter than FY21's −32.

The full loop: cash goes out to suppliers and production on day 0; stock waits 31 days to sell; customers pay about 18 days after that; and suppliers themselves are paid at 88 days — netting out to the −40-day cycle.

In money terms: at FY26 sales of ₹47,411 Cr, each day of the cycle holds about ₹130 Cr — so the −40-day loop keeps roughly ₹−5,196 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹2,963 Cr over the last 3 fiscal years against ₹2,437 Cr of depreciation — building somewhat ahead of wear-and-tear. Capital work-in-progress stands at ₹765 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: neither the cycle nor the build-out is hoarding the cash — the machine is reasonably clean.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Hero MotoCorp Ltd earns a ROCE of 35% in FY26. That is up from a trough of 18% in FY22. Return on invested capital clears the cost of that capital by +34.5 percentage points, so growth here adds value rather than only size. The wiring behind it is 12.2% net margin on 1.42× asset turns.

FY26 ROCE is 35%, recovered from a FY22 trough of 18% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 12.2% net margin × 1.42× asset turns × 1.55× balance-sheet leverage ≈ 26.9% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 46.5% − 12.0% = a +34.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Hero MotoCorp Ltd carries total debt of ₹779 Cr against shareholder equity of ₹21,811 Cr as of Mar 26, a debt-to-equity of 0.04 — effectively unlevered. On the annual view that ratio went from 0.04 in FY22 to 0.04 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹779 Cr against shareholder equity of ₹21,811 Cr — a debt-to-equity of 0.04. On the annual view, debt-to-equity went from 0.04 (FY22) to 0.04 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions cut 2.6 points of Hero MotoCorp Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 24.3% of the company. Foreign institutions moved +1.2 points over the same window, to 31.1%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: −2.6 points over 8 quarters to 24.3%; Foreign institutions: +1.2 points over 8 quarters to 31.1%; Promoters: +0.0 points over 8 quarters to 34.7%.

🚨 Why the register moved: domestic institutions drove it (−2.6 points), absorbed on the other side by foreign institutions (+1.2 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Hero MotoCorp Ltd: the Z-score reads 8.46. A Z-score above roughly 3 reads as safe and below roughly 1.8 as the distress zone, so this sits well clear of distress. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure.

Why it matters: a Z-score of 8.46 sits well clear of the distress zone — the balance sheet is not the risk here.

The safety line in one sentence: the Z-score reads 8.46.

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