Hero Moto Beats Es­ti­mate, but Stock Seen Range­bound

The Economic Times - - Money -

ris­ing raw ma­te­rial prices, which af­fect the com­pany with a lag of three-six months. Steel prices have firmed up 25% in the De­cem­ber quar­ter and bills raised by ven­dors in the near term will be based on the higher prices.

In a con­fer­ence call, the com­pany’s man­age­ment said that while the de­mand is re­cov­er­ing, it has still not nor­malised. It ex­pects sin­gle-digit vol­ume growth in the next fis­cal.

At Thurs­day’s clos­ing price of ₹ 3,264.3, the stock was trad­ing at 16.1 times FY18 pro­jected earn­ings, whichisan8.4%pre­mi­um­toit­s­longterm av­er­age price mul­ti­ple. The lower P/E pre­mium cap­tures hazy vol­ume vis­i­bil­ity in the near term.

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