Hero MotoCorp shares rally 3% on acquiring 32.5% stake in Euler Motors for ₹525 crore to enter electric 3-W segment | Stock Market News
Source: Live Mint
Hero MotoCorp share price gained over 3% on Friday after the auto major announced strategic investment into the electric three-wheeler category. Hero MotoCorp shares rose as much as 3.23% to ₹3,713.40 apiece on the BSE.
The world’s largest manufacturer of motorcycles and scooters, Hero MotoCorp will acquire a 32.5% stake in electric three and four-wheeler vehicles maker Euler Motors for ₹525 crore.
“The Company’s board has approved a strategic investment of up to ₹525 crore (in one or more tranches), in Euler Motors Private Limited. This investment will provide Hero MotoCorp with a strong foothold in the fast-growing electric three-wheeler market, where EVs are projected to account for 35% of total sales in the near future,” Hero MotoCorp said in a regulatory filing on March 20.
Euler Motors has a presence in 30 cities in India and is engaged in the designing, manufacturing and sale & service of electric three-wheelers. The company had recently launched their first electric commercial four-wheeler.
Euler’s turnover for the financial year ended March 31, 2024 was ₹172 crore as against ₹49 crore in FY23.
“The primary investment would be made by Hero MotoCorp Ltd (HMCL) in Equity Shares and Series D Compulsory Convertible Preference Shares; pursuant to which HMCL’s stake would be approximately 32.5% on a fully diluted basis. Additionally, within the aforementioned amount, HMCL may acquire shares from existing shareholders of Euler by way of secondary sale,” Hero MotoCorp added.
Should you buy Hero MotoCorp shares?
Hero MotoCorp share price has fallen 4% in one month and has dropped 11.5% on a year-to-date (YTD) basis. The auto stock has declined more than 38% in the past six months, and 18% in one year.
However, in the long term, Hero MotoCorp shares have given decent returns to shareholders. Hero MotoCorp stock price has rallied 58% in two years, and has delivered multibagger returns of 104% in the past five years.
“After a steep correction over the past six months, Hero MotoCorp has tested its buying climax target of ₹3,490 and is now staging a strong rebound. The recovery comes with a surge in volumes above the 50-day EMA (Exponential Moving Average), signaling renewed buying interest. Hero MotoCorp stock has already tested the 10- and 20-day EMAs and is now heading toward the crucial 50-day EMA at ₹3,900. While the bounce is strong, sustained momentum above this level will be key for further upside,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.
He recommends traders should watch for confirmation before taking fresh long positions in Hero MotoCorp shares.
At 11:05 AM, Hero MotoCorp shares were trading 2.91% higher at ₹3,701.50 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
