Shares of Hero MotoCorp Ltd., the two-wheeler manufacturer surged as much as 8.7% on Wednesday to a record high of ₹5,775. With this, the stock has extended its gains for 2024 to 38%, making it the third best performing stock on the Nifty 50 index, after Mahindra ^ Mahindra (up 58%) and Bajaj Auto (up 40%).
Hero MotoCorp, along with all other constituents of the Nifty Auto index are trading with gains, in-line with the broader market rebound. The Auto index has recovered all of the losses that it made during Tuesday's trading session, during which it fell 3.3%.
Shares of Hero MotoCorp are up 10% so far in the month of June, having gained 12.6% in May. The stock has declined 4% each in February and April this year.
The Lok Sabha election results of 2024 threw up a mandate that the street had not anticipated with the BJP falling short of the majority mark of 272, even as the NDA coalition secured a simple majority. Most brokerages have turned cautious, turning their portfolio towards the defensive bent.
Brokerage firm Bernstein wrote that they would wait to see how will the new government handle rural distress and also does not expect rural spending to pick up until December, even as the upcoming monsoon will provide some respite.
A pick-up in rural consumption or a revival in the rural economy is generally beneficial for two-wheeler manufacturers like Hero and Bajaj Auto as their entry-level bikes would see increased sales via an aspirational middle class.
Hero MotoCorp is also in focus as it was included in the Emkay Model portfolio on Tuesday, along with other auto names like Maruti Suzuki. The brokerage remains overweight on consumer durables with greater focus on OEMs over ancillaries.
Shares of Hero Moto are off the day's high but remain 6.5% higher at ₹5,650.
