Tuesday 11 November 2008

Buy Hero Honda: HDFC Securities

HDFC Securities has recommended a buy rating on Hero Honda Motors in its November 11, 2008 research report. "Higher volume performance and expectation of higher profits, will lead to a strong upside from current levels for HHML. The company had a very low net debt to equity ratio of 0.04x at the end of FY 2008 and an interest coverage ratio of 38x. The company had a strong cash position of Rs 1.3 billion. We have assigned a multiple of 14.7x to our FY 2010E EPS of Rs 71.3 and arrived at a base case target price of Rs 1,048 per share (raw material to sales ratio of 71.3%, excise duty of 12.7% and volume growth of 10% yoy in FY 2010), which translates into an upside of 39% from current levels and initiate coverage with a 'BUY' rating," says HDFC Securities' research report.

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Source: Moneycontrol

Posted by Harsh at 07:37

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