M&M vs Hero MotoCorp: A Comparison of Leading Indian Auto Stocks

Mahindra & Mahindra (M&M) and Hero MotoCorp are two of India’s top auto manufacturers. M&M has gained attention for its new electric vehicle (EV) models, while Hero MotoCorp has seen growth thanks to strong quarterly performance despite external challenges. Let’s dive into the performance, product pipelines, and outlook for these 2 auto giants.

Q2FY25 Earnings Overview

The Q2FY25 results were mixed across the auto sector. Original equipment manufacturers (OEMs) experienced modest topline growth due to weak performance in commercial vehicles (CV), passenger vehicles (PV), and luxury vehicle segments. However, auto ancillaries reported strong earnings. Tyre companies faced challenges with rising rubber prices, impacting their margins, while bearing companies showed a mixed performance. With rubber prices expected to decline, tyre companies could see a margin boost in the near future.

M&M vs Hero MotoCorp: Product Pipeline and Innovation

M&M’s New Electric Vehicles

M&M has made strides in the EV market, launching 2 new electric SUVs, the BE 6e and XEV 9e, at competitive price points. Both vehicles offer impressive range and fast charging capabilities. The BE 6e promises a range of 535-682 km, while the XEV 9e offers 542-656 km. These models will be available in January 2025, with deliveries starting in February. M&M’s aggressive push in the EV market aims to attract adventurous customers, but challenges like developing adequate charging infrastructure remain.

Hero MotoCorp’s Expanding Portfolio

Hero MotoCorp plans to expand its product lineup in both the entry-level and premium two-wheeler segments. Upcoming models include the Xpulse 210, Xtreme 250R, and Karizma XMR250. The company also aims to enhance its EV offerings across various price points. As of September 2024, Hero has opened 58 Premia stores to cater to premium customers, with a target of 100 stores by FY25.

Share Price Trends

M&M’s Performance

Mahindra and Mahindra share price is currently trading at ₹3,019.90, showing a gain of ₹53.80 (1.81%) as of 12:27 PM on December 2. The stock opened at ₹2,995.00, reached a high of ₹2,984.00, and hit a low of ₹3,023.75 during the day. Its 52-week high is ₹3,222.10, while the 52-week low is ₹1,575.00.

Hero MotoCorp’s Performance

Hero MotoCorp share price is currently trading at ₹4,747.00, down by ₹14.70 (0.31%) as of 12:30 PM on December 2. The stock opened at ₹4,750.00, reached a high of ₹4,733.50, and hit a low of ₹4,779.00 during the day. Its 52-week high is ₹6,246.25, while the 52-week low is ₹3,683.00.

Demand Outlook: Strong Growth for Both Companies

Hero MotoCorp

Hero saw a 13% increase in retail volumes during the festive season, boosting its market share to 31.6%. The company expects this growth trend to continue with a strong marriage season, rural recovery, and government spending. Additionally, Hero has achieved a 20% EV market share in key cities like Kolkata, Mysore, and Cuttack. The company’s large presence in the 100-110cc segment positions it well for a recovery in rural markets.

M&M

M&M’s focus on EVs is evident as it rolls out 2 feature-packed models. The company’s strategy targets customers who enjoy long-distance travel, but the adoption of EVs will depend on the development of charging infrastructure. M&M’s strong tractor sales and record-breaking automobile volumes in Q2FY25 suggest that it is well-positioned for future growth.

Financial Performance: Profits and Margins

Hero MotoCorp’s Growth

Hero MotoCorp reported a 14% YoY increase in net profit, reaching ₹1,204 crore for Q2FY25. Revenue for the quarter grew 11% to ₹10,463 crore. The company’s EBITDA rose 14% to ₹1,147 crore.

M&M’s Strong Results

M&M’s consolidated net profit jumped 35% YoY to ₹3,171 crore in Q2FY25. Revenue from operations grew 10% to ₹37,689 crore. The company also reported a 30% increase in EBITDA and improved margins. M&M’s robust performance was driven by strong sales in both its automobile and tractor segments.

Conclusion

Both M&M and Hero MotoCorp have solid growth prospects. M&M’s push into the EV market makes it an appealing choice for those looking at long-term potential in sustainable mobility, while Hero MotoCorp’s steady performance in the two-wheeler segment, especially with its expanding EV lineup, offers strong returns. Investors should weigh these factors carefully when deciding.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.