Current Rating and Its Significance
MarketsMOJO currently assigns Hero MotoCorp Ltd. a 'Buy' rating, reflecting a positive outlook on the stock’s potential for investors seeking growth with a reasonable risk profile. This rating indicates that the stock is expected to outperform the broader market over the medium to long term, supported by solid fundamentals and favourable valuation metrics. The 'Buy' grade is derived from a comprehensive assessment of four key parameters: Quality, Valuation, Financial Trend, and Technicals.
Quality: Strong Fundamental Backbone
As of 16 February 2026, Hero MotoCorp demonstrates excellent quality metrics. The company boasts a robust long-term Return on Equity (ROE) averaging 20.04%, signalling efficient capital utilisation and consistent profitability. Operating profit has grown at an annualised rate of 15.10%, underscoring steady operational performance. Additionally, the company maintains a very conservative capital structure with an average Debt to Equity ratio of zero, indicating minimal financial leverage and lower risk exposure. These factors collectively contribute to the stock’s excellent quality grade, reassuring investors of the company’s sustainable earnings power and financial health.
Valuation: Attractive and Reasonable
Currently, Hero MotoCorp’s valuation is considered attractive. The stock trades at a Price to Book (P/B) ratio of 5.3, which is fair relative to its historical averages and peer group valuations in the automobile sector. The company’s ROE of 25.2% further supports this valuation, suggesting that investors are paying a reasonable price for the quality of earnings generated. The Price/Earnings to Growth (PEG) ratio stands at 0.6, indicating that the stock’s price growth is favourable compared to its earnings growth, a positive sign for value-conscious investors. Over the past year, the stock has delivered a strong return of 44.33%, while profits have increased by 33.3%, reflecting a healthy balance between price appreciation and fundamental growth.
Financial Trend: Stable with Growth Potential
The financial trend for Hero MotoCorp is currently flat but stable, signalling a steady performance without significant volatility. The company’s operating profit growth and consistent ROE highlight a resilient business model capable of weathering market fluctuations. Institutional investors hold a significant 55.8% stake in the company, which has increased by 0.65% over the previous quarter. This high level of institutional ownership often reflects confidence in the company’s long-term prospects and can provide stability to the stock price. The company’s large-cap status within the automobile sector further supports its ability to sustain growth and navigate competitive pressures.
Technicals: Mildly Bullish Momentum
From a technical perspective, Hero MotoCorp exhibits mildly bullish characteristics. The stock’s recent price movements show resilience, with a 6-month return of +18.36% and a 3-month gain of +0.72%. Despite a slight dip of -0.17% on the day of analysis, the overall trend remains positive. The stock has outperformed the BSE500 index over the last one year, three years, and three months, demonstrating consistent market-beating performance. This technical strength complements the fundamental outlook, suggesting that the stock is well-positioned for further appreciation in the near term.
Performance Overview
As of 16 February 2026, Hero MotoCorp’s stock returns reflect strong investor confidence and solid operational execution. The stock has delivered a one-year return of 44.33%, significantly outperforming broader market indices. Shorter-term returns show some volatility, with a one-week decline of -3.22% and a one-month dip of -1.42%, but these are offset by positive longer-term gains. The year-to-date return stands at -3.47%, indicating some recent market pressure, yet the overall trajectory remains upward. This performance profile aligns with the 'Buy' rating, suggesting that the stock offers attractive upside potential balanced with manageable risk.
Fundamentals that don't lie! This Small Cap from Trading shows consistent growth and price strength over time. A reliable pick you can truly count on.
- - Strong fundamental track record
- - Consistent growth trajectory
- - Reliable price strength
What This Rating Means for Investors
For investors, the 'Buy' rating on Hero MotoCorp Ltd. signals a favourable opportunity to consider adding the stock to their portfolios. The combination of excellent quality, attractive valuation, stable financial trends, and positive technical indicators suggests that the company is well-positioned to deliver sustainable returns. While the rating does not guarantee immediate gains, it reflects a consensus view that the stock’s fundamentals and market position justify a positive investment stance.
Investors should note that all financial data and returns referenced are current as of 16 February 2026, ensuring that decisions are based on the latest available information rather than historical snapshots. This approach helps in making informed choices aligned with prevailing market conditions and company performance.
Sector and Market Context
Operating within the automobile sector, Hero MotoCorp benefits from its large-cap status and strong brand recognition. The sector has experienced varied performance recently, with shifts in consumer demand and regulatory changes influencing market dynamics. Hero MotoCorp’s ability to maintain strong profitability and growth amid these conditions highlights its competitive advantages. The stock’s outperformance relative to the BSE500 index over multiple time frames further underscores its resilience and appeal within the sector.
Summary
In summary, Hero MotoCorp Ltd.’s current 'Buy' rating by MarketsMOJO reflects a well-rounded assessment of the company’s strengths and market position as of 16 February 2026. Investors can take confidence from the stock’s excellent quality metrics, attractive valuation, stable financial trends, and mildly bullish technical outlook. While short-term fluctuations are possible, the overall profile supports a positive investment view for those seeking exposure to a leading player in the automobile industry.
Key Metrics at a Glance (As of 16 February 2026)
- Mojo Score: 72.0 (Buy Grade)
- Return on Equity (ROE): 20.04% (Long-term average)
- Operating Profit Growth: 15.10% annualised
- Debt to Equity Ratio: 0 (Low leverage)
- Price to Book Value: 5.3
- PEG Ratio: 0.6
- Institutional Holdings: 55.8%
- 1-Year Stock Return: +44.33%
- 6-Month Stock Return: +18.36%
- YTD Return: -3.47%
These figures highlight the company’s strong fundamentals and market performance, supporting the current 'Buy' recommendation.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
