El Niño concerns for Hero MotoCorp are overstated, says CLSA. Here’s why

The target implies an upside potential of nearly 17% from Hero MotoCorp’s closing price of ₹4,894 on Wednesday.

CLSA said concerns surrounding the impact of El Niño on the company’s performance appear overstated. Its analysis found no meaningful historical correlation between rainfall patterns and Hero MotoCorp’s domestic two-wheeler volume growth over the last two decades.

The brokerage mentioned that Hero MotoCorp has consistently delivered positive volume growth, excluding the Covid period and major regulatory transitions, while maintaining EBITDA margins above 14%.

CLSA expects the company to benefit from a GST rate cut and a strong scooter launch pipeline. It has factored in a 5% volume CAGR for FY27 and FY28, while forecasting EBITDA margins of around 14%.

According to the brokerage, the stock’s current valuation of 15 times forward earnings implies zero volume CAGR and EBITDA margins of 13.5% for FY27 and FY28, creating an attractive risk-reward opportunity for investors.

Among the 43 analysts tracking Hero MotoCorp, 29 have a ‘Buy’ rating on the stock, while nine recommend ‘Hold’ and five maintain a ‘Sell’ rating.

Hero MotoCorp shares ended Wednesday’s session 1.62% lower at ₹4,894. The stock has declined more than 16% so far in 2026.