Is Hero MotoCorp overvalued or undervalued?

Jul 17 2025 08:01 AM IST
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As of July 16, 2025, Hero MotoCorp is considered very attractive and undervalued, with a PE ratio of 20.20, an EV to EBIT of 16.00, and a ROCE of 40.13%, outperforming peers like Bajaj Auto and Eicher Motors, despite a recent one-year stock return of -20.62% and a YTD performance of 6.24%.
As of 16 July 2025, Hero MotoCorp's valuation grade has moved from attractive to very attractive, indicating a positive shift in its market position. The company is currently assessed as undervalued. Key ratios supporting this conclusion include a PE ratio of 20.20, an EV to EBIT of 16.00, and a ROCE of 40.13%.

In comparison to its peers, Hero MotoCorp stands out with a significantly lower PE ratio than Bajaj Auto at 31.57 and Eicher Motors at 32.51, both categorized as expensive. Additionally, while Hero MotoCorp's PEG ratio is 1.51, it remains more favorable than the higher valuations of its competitors. Despite a recent one-year stock return of -20.62%, the company's YTD performance of 6.24% outpaces the Sensex's 5.75%, reinforcing its undervalued status in the current market.
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