Is Hero MotoCorp overvalued or undervalued?

As of 18 July 2025, the valuation grade for Hero MotoCorp has moved from attractive to very attractive, indicating a positive shift in its market perception. The company is currently considered undervalued. Key ratios include a PE ratio of 20.09, an EV to EBITDA of 13.70, and a dividend yield of 3.18%.
In comparison to its peers, Bajaj Auto has a significantly higher PE ratio of 31.84, while Eicher Motors stands at 32.62, both categorizing them as expensive. This positions Hero MotoCorp favorably within the industry, especially considering its robust ROCE of 40.13% and ROE of 22.72%. Notably, despite a recent dip in stock price, Hero MotoCorp has outperformed the Sensex over the past week and month, reinforcing its undervalued status.