Hero Motocorp (HEROMOTOCO)

FairStock Score: 87/100 — HIGH CONVICTION

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 1/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Mr. Market is asking ₹5790 for Hero Motocorp, a ₹1.16 lakh Cr two/three-wheeler business. On quality, the numbers speak: ROE 28.24%, ROCE 30.34%, debt/equity just 0.04, Piotroski 8/9, Altman Z 5.38. That tells me the balance sheet is fortress-like and the business earns high returns on capital without leverage. Free cash flow of ₹2,594 Cr and a 3.20% dividend yield are real cash returns, not accounting hope. Latest quarter sales ₹12,487 Cr and net profit ₹1,275 Cr, with recent sales/profit growth around 30%, show cyclical/recovery momentum. But Graham would caution: five-year revenue CAGR is only 6.94%, so this is not a consistent fast grower. The moat shows in high ROCE and cash generation, but I must not overpay. Valuation is the rub. P/E 21.28, P/B 5.36, EV/EBITDA 17.59, PEG 1.47. DCF intrinsic value ₹5,824 is almost exactly the ₹5,790 price, so it's roughly fair value by that model. Yet Graham Number is ₹2,429.35, giving a negative margin of safety of -135.04%. That means asset-based Graham bargain hunters get no comfort. Dividend yield 3.20 and F-score 8/9 offer support, but the price already reflects quality. At ₹1.16 lakh Cr, Hero Motocorp looks like a stalwart: financially strong, profitable, cash-rich, but not cheap on Graham metrics. I'd want a wider discount or evidence that the 5-year 6.94% revenue CAGR can sustainably accelerate. FairStock score 87/100 suggests high conviction on quality, not necessarily on price. Buy quality, but only at a sensible price.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer