Today's Opening - 2707
Today's High - 2713
Today's Low - 2614
Today's Closing - 2689
After a marginal rise yesterday, the stock has dropped today to neutralize the gain made yesterday and today's volume was on the higher side.
The 14-day Negative Directional Index has been stronger than the Positive Directional Index since 2nd Jan.
The 12, 26-day Moving Average Convergence Divergence has been negative since 4th Jan. The stock has been closing below the 5-day Exponential Moving Average since 12th Feb.
The 2-day Relative Strength Index value has dropped below 50 since 12th Feb. The 20-day Commodity Channel Index has been negative since 13th Feb.
The 12, 26-day Moving Average Convergence Divergence has been negative since 4th Jan. The stock has been closing below the 5-day Exponential Moving Average since 12th Feb.
The 2-day Relative Strength Index value has dropped below 50 since 12th Feb. The 20-day Commodity Channel Index has been negative since 13th Feb.
Corporate Activity:
These are interesting times for the domestic two-wheeler industry, where four large players, viz. Hero Motocorp, Bajaj Auto, TVS Motor Company and Royal Enfield control 70% of the market.
Hero launched the 125cc scooter Destini in Oct last year to revive its fortunes in the scooter segment. Bajaj has been banking on its CT 100 and entry variant of the Pulsar model to rev up their nos. TVS, maker of the Apache and Jupiter models, has launched their first 125cc scooter NTorq to try and make an impact in the scooter segment. Being in the same leisure bike category and operating in a similar price band, the surge in demand for the Jawa models, seems to have softened the demand for Royal Enfield bikes.
After having a R&D hub, the Center for Innovation & Technology (CIT) in Jaipur, Hero Motocorp has setup another R&D center at Munich in Germany, first one outside India.
Inspite of 11% growth in two-wheeler sales in the calendar year 2018 versus 2017, the Q3 EBITDA dropped by 4.6% on a YoY basis on account of rising raw material costs. However, in absolute nos., the company has been able to maintain 50.9% market share on the back of its strong distribution network and brand recall.
Hero is under represented in the high growth premium bike and scooter segments. In order to capture growth in these segments, it has unveiled two 200cc motorcycles - XPulse and Xtreme 200R, marking Hero's entry in the premium bike segment. The launch of Destini has helped the company gain 10% market share in the 125cc scooter segment. With the next leg of growth in the scooter segment expected to come from the 125cc segment, the company has launched Maestro Edge 125 and Duet 125.
In Q3 FY 19, YoY export volume growth was a healthy 25%. The company is planning to increase their export presence to 40 countries from the current 20 over the next few years. However, foray into the export market could be challenging for the company as its a later entrant and Bajaj Auto has already made a significant presence in those markets.
Stock Movement:
In my post dated 24th July, I had mentioned that in case 3072 gets broken decisively, Hero Motocorp might further come down to 2958. The stock has dropped almost 17% since my last post. The stock had touched the multi-year low of 2561 on 31st Jan and is reluctantly trying to move up. In case 2561 gets broken, the stock can further go down to 2375. In case of a less likely scenario of revival, the stock has a resistance at 2960. Keep accumulating on dips with a long-term view.
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