Hero MotoCorp : As this auto stock expands into EVs, brokerages become optimistic and see significant upside.

Vida’s worry-free ecosystem gives us an advantage: Pawan Munjal, Chairman and Managing Director of Hero MotoCorp, on the unveiling of the first electric scooter

Hero MotoCorp, India’s largest two-wheeler manufacturer, revealed its first electric scooter on Friday and said in an interview with Sharmistha Mukherjee that it will go global with its latest introduction as early as next year. He added that V1 is simply the first of a bouquet of products and services planned under the mother brand for growing mobility business unit Vida for local and international markets, and that Hero will eventually drive in electric bikes.

Hero MotoCorp has launched a luxury scooter into the electric vehicle (EV) market. The firm has released its first self-developed product, the E2W VIDA V1, which is positioned at the top of the electric scooter market.

“Hero intends to build an ecosystem for EVs under VIDA, which will include multiple product launches, omni-channel distribution including a D2C model with several ownership options, and financing and service subscription plans,” said global brokerage house Jefferies while rating Hero Moto shareswith a Buy rating and a target price of  ₹3,000 apiece (USD$37 Aprox).

Hero intends to expand its EV line to include a variety of pricing points and application cases. Hero plans to extend its EV offering in the medium future, including high-performance e-motorcycles and B2B vehicles. “Hero is taking an omni-channel strategy to EV distribution, with future ambitions to open EV-specific dealerships.” The success of Hero’s EVs could boost the company’s long-term growth prospects, according to the note.

V1 will be launched in a phased manner, with the product being available for retail sales in Delhi, Bengaluru and Jaipur to begin with and, subsequently, in other cities and it will eventually see presence in export markets.

“We want to launch Vida V1 in a number of worldwide markets very shortly. Bangladesh and Colombia, where we have joint operations, could be potential markets. We also intend to visit established markets in Europe, as well as select regions in Latin America and Asia. Vida’s products, services, and ecosystem have been created for the worldwide client in order to provide a globally differentiated experience.” he added.

Analysts at brokerage Emkay said that they attended HMCL’s electric-scooter launch, where it unveiled its first offering of the V1 model with the Vida brand, with more models expected to be introduced ahead that would cater to the B2B, motorcycle and other use-case customer

“In our view, the Vida V1 model has been well-designed, scores above peers on performance and has buy-back assurance. However, the pricing is 20-40% higher than peers’ models such as TVS iQube and Ather 450 Plus. This pricing gap is likely to fill up in future, as more model launches are expected across different price-points,” it said.

Emkay has maintained its bullish stance on auto stocks, citing predictions of a cyclical upturn in domestic 2Ws that will continue at least three years, more concentration on EVs, margin growth from better scale, and low valuations. It is also rated Buy, with a target price of $3,300 per share (USD$37 Aprox).

When asked , “Are there any other technologies that Hero MotoCorp is focusing on besides electric?
Let me state that we are just getting started with this. Allow us some time to get used to the EVs. Let’s take this across the country and around the world. Of course, there is always innovation at CIT (centre of innovation and technology), as well as between CIT and our Tech Centre in Germany. Future technology is being developed.”

Also , “With the V1, are you focusing on sales quantities from the start?

We offer class-defining versatility and customizable possibilities. The complete package includes first-in-industry initiatives such as three-day experience customer test-rides, a confirmed repurchase on the Vida V1 after 16-18 months of ownership, green EMIs, and the lowest financing rate available. I am confident that customers will be drawn to Vida because of its value and trust promise.

We are working hard to expand the category, which will benefit everyone. This expansion will ensure that the benefits of EVs are spread to a larger number of individuals, and the industry will benefit from expanded numbers.”