Title: Relationship of Hero Motocorp Limited with Nifty50.
Author: Harsh Kalra
Introduction : Hero Company or officially known as Hero MotoCorp Limited is an Indian multinational scooter and motorcycle manufacturer company, and it was formerly known as Hero Honda Company. Hero Company, which is currently headquartered in New Delhi, India, was previously known as Hero Honda Company as it was a joint venture between Hero Company of India and Honda Company of Japan. Currently, Hero Company is the largest two-wheeler manufacturer in India as well as in the world, and the market share of this company is about 31.7% in the two-wheeler Indian market. As per the latest report of May 27, 2021, this company’s total market capitalization worth was USD 7.8 Billion (Approx INR 59,600 Crore). The shares of this company are currently listed and traded on NIFTY, Bombay Stock Exchange (BSE), and NSE (New York Stock Exchange).
Hero MotoCorp Limited is the worlds largest manufacturer of two wheelers. The Company is engaged in the manufacturing and selling of motorised two-wheelers, spare parts and related services. The Company has over 9.50 million annual production capacity across 8 manufacturing facilities. Hero MotoCorp Limited was incorporated in January 19th, 1984 under the name Hero Honda Motors Ltd.
Objectives: To calculate beta and find its significance.
Views & Reviews:
Hero MotoCorp revs up investor interest with its dominant market share, consistent profitability, and recent foray into electric vehicles. However, occasional quality hiccups, dealership inconsistencies, and premium valuation (₹3,948.60, high P/E & P/B) raise caution flags. Weigh its healthy financials (25% YTD gain) against potential innovation lag for a “cautiously optimistic” long-term outlook. Analyze thoroughly before hitting the gas.
More Hero MotoCorp Reviews for Investors:
Bullish:
- ICICI Direct: “Strong brand and financials, EV momentum makes it a long-term buy.”
- Motilal Oswal: “Dominant market leader, undervalued compared to global peers.”
- Elara Capital: “Rural revival and EV foray to drive future growth.”
Neutral:
- Edelweiss: “Quality concerns & valuation overhang, hold with neutral view.”
- Credit Suisse: “Competitive landscape and potential slowdown are headwinds.”
- HDFC Securities: “Wait for valuation correction before entry.”
Bearish:
- Emkay Global: “Innovation lag and service inconsistencies worry us.”
- Investec: “Potential for market share erosion, prefer Bajaj Auto.”
- Spark Capital: “High valuation lacks enough growth triggers, avoid.”
Data Analysis:
Equation: Y= 0.431876960+ 0.07804105x
Interpretation:
The above equation shows the relation between Nifty50 and Hero Motocorp Ltd.
Return of Hero Motocorp Limited is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of Hero Motocorp Limited will also rise by 0.0013132 and vice-versa.
Number of observations are 49.
0.2486063 is the t-stat for Y, the p-value for which is 0.8047483
R square is 0.001313 which means 0.13% of variances in Hero Motocorp Limited are explained by Nifty.
F is 0.06180513, p-value for this is 0.804748 which means model is statistically significant at 1% level.
Conclusion: Beta is -0.43187696 which is less than 1, it means that Hero Motocorp Limited is good for long term investment.
References:
https://www.indiainfoline.com/company/hero-motocorp-ltd/summary/237
https://www.nseindia.com/reports-indices-historical-index-data ,
https://www.nseindia.com/get-quotes/equity?symbol=HEROMOTOCO