Hero Motocorp's intrinsic value using Intellectual Capital analysis

Hero Motocorp

BSE : 500182

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NSE : HEROMOTOCO

Industry : Auto 2/3 wheeler

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ISIN : INE158A01026

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FreeFloat : 50.00%

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FnO : Yes

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LotSize : 200

BSE SENSEX | BSE SENSEX 50 | Nifty 50 | Nifty50 Equal Weight | BSE 100 | BSE 100 Largecap TMC | BSE 200 | BSE 250 LargeMidcap | BSE Largecap | BSE LargeMidcap | Nifty 100 | Nifty 200 | Nifty LargeMidcap 250 | Nifty100 Equal Weight | Nifty Alpha Quality Low Volatility 30 | Nifty Alpha Quality Value Low Voltlty 30 | Nifty Quality Low Volatility 30 | BSE Auto | Nifty Auto | BSE Dividend Stability | BSE Quality | Nifty Dividend Opp 50 | Nifty Low Volatility 50 | Nifty100 Low Volatility 30 | Nifty100 Quality 30 | Nifty200 Quality 30 | Nifty50 Value 20 | BSE 100 ESG | BSE CARBONEX | Nifty100 Enhanced ESG | Nifty100 ESG | BSE India Manufacturing | Nifty India Consumption

Intellectual Capital (IC)	22,145.18
Net Worth (NW)	12,857.12
Intrinsic Worth (IW)	35,002.30
Market Cap (MC)	50,993.27
Economic Value Added	250.07

Discount Rate	%
Liquidity Premium	%

Knowledge Basis (IC/IW)	63.27%
IC Gross Margin (EBITDA/IC)	25.53%
IC Net Margin (NPT/IC)	15.13%
Knowledge Turnover (Sales/IC)	1.52
Market to Intrinsic Value (MC/IW)	1.46

As Of	Intrinsic Value	Market Price
31 Mar 2019	Rs. 1,752.51	Rs. 2,553.15
26 Jun 2019	-	Rs. 2,573.60

Fundamental - medium term		Technical - near term		Combined outlook
EVA > 0 : Yes	Buy	10 DMA : Rs. 2,631.38	Sell	Avoid
KB > 50% : Yes		50 DMA : Rs. 2,650.05
0 < M2IV < 1 : No		Vol-Price trend : Falling

Question 3 - Is this stock undervalued?

Question 2 - Does this business have significant knowledge assets?

Question 1 - Is this business generating enough profits to cover its cost of capital?

* EVA is a registered trademark of Stern Stewart and Co.

Quarterly Results (Rs. Cr)

Quarter

Type*

Sales

Income

EBITDA

EBIT

PBT

PAT

NPT

Jun-16
S
8010.66
8131.04
1350.46
1235.22
1233.72
883.10
882.08

Sep-16
S
8448.74
8601.10
1521.23
1401.98
1400.43
1004.22
994.72

Dec-16
S
6898.64
7030.57
1211.67
1086.82
1085.30
772.05
772.05

Mar-17
S
7488.08
7606.31
1075.79
940.49
939.01
717.75
714.19

Jun-17
S
8612.91
8744.61
1427.61
1294.66
1293.08
914.04
910.52

Sep-17
S
8361.99
8479.59
1573.30
1437.27
1435.71
1010.49
1006.97

Dec-17
S
7305.49
7415.51
1268.01
1129.73
1128.16
805.43
809.79

Mar-18
S
8564.04
8730.54
1537.09
1388.75
1387.21
967.40
965.37

Jun-18
S
8809.82
8925.55
1493.02
1344.85
1342.74
909.17
905.99

Sep-18
S
9090.94
9314.60
1602.37
1450.59
1448.45
976.28
973.10

Dec-18
S
7864.82
8052.46
1292.41
1140.58
1138.42
769.10
765.92

Mar-19
S
7884.96
8049.18
1233.54
1083.31
1081.12
730.32
722.05

* C - Consolidated, S - Standalone