Hero Motocorp's intrinsic value using Intellectual Capital analysis

Hero Motocorp

BSE : 500182

|

NSE : HEROMOTOCO

Industry : Auto 2/3 wheeler

|

ISIN : INE158A01026

|

FreeFloat : 50.00%

|

FnO : Yes

|

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)	22,291.71
Net Worth (NW)	15,219.90
Intrinsic Worth (IW)	37,511.61
Market Cap (MC)	48,794.28
Economic Value Added	378.34

Discount Rate	%
Liquidity Premium	%

Knowledge Basis (IC/IW)	59.43%
IC Gross Margin (EBITDA/IC)	22.70%
IC Net Margin (NPT/IC)	17.27%
Knowledge Turnover (Sales/IC)	1.40
Market to Intrinsic Value (MC/IW)	1.30

As Of	Intrinsic Value	Market Price
31 Dec 2019	Rs. 1,878.15	Rs. 2,443.05
18 Feb 2020	-	Rs. 2,252.65

Fundamental - medium term		Technical - near term		Combined outlook
EVA > 0 : Yes	Buy	10 DMA : Rs. 2,373.47	Sell	Avoid
KB > 50% : Yes		50 DMA : Rs. 2,400.45
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

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
C
7953.10
8120.44
1110.84
955.48
1111.47
760.79
771.44

Jun-19
C
8185.66
8410.10
1173.12
930.66
1881.60
1248.40
1252.22

Sep-19
C
7660.60
7825.16
1262.72
1053.01
1039.22
883.78
879.64

Dec-19
C
7074.86
7259.39
1267.15
1056.18
1044.44
905.13
900.08

* C - Consolidated, S - Standalone