Target: ₹4,888

CMP: ₹4,314.20

The recent announcement by Hero Motocorp (HMCL), to enter the BAAS (Battery-as-a-Service) segment for its Vida brand, with an expected price of ₹59,490 (ex-showroom), will help it to gain market share more rapidly in the E-2W space.

Currently, the TCO (total cost of ownership) for the vehicle with on road price of ₹1 lakh (2kW) stands at approximately ₹2.85/km, whereas the TCO for the Vida VX2 is about ₹2.01/km (ex-BaaS charges). An additional charges per km ₹0.96/km would make the TCO of both vehicles largely the same. However, the initial acquisition cost is significantly lower for the buyer, which is one of the major deciding factors while purchasing the vehicle.

HMCL is strategically positioned to capitalise on strong economic momentum, increasing income levels, rapid urbanization, and greater access to affordable financing, all of which fuel demand for two-wheelers.

Our analyst expects Hero MotoCorp to show healthy volume growth ahead led by rural recovery, traction in entry level bikes by first time buyers, and increasing in market share in 125CC+ segment (X-Pulse Xtreme, Harley and Mavrick) and scaling up the EV portfolio. Further, as a long-term strategy road map such as showroom revamp, upgradation of portfolio will support volumes to grow better than industry. We recommend Add rating on the stock with TP of ₹4,888 (17x of Sep-26E EPS).

Published on July 3, 2025