Hero MotoCorp: Expectations of normal monsoon to keep up rural demand

Strong rural sales, higher festive demand, good response to new models, helped Hero record 20% growth in two-wheeler sales in March

The Hero MotoCorp stock has gained nearly 10 per cent since its March-end lows on expectations of strong volume growth in FY19 led by robust rural demand. Given the positive rural sentiment following a good rabi season, higher minimum support prices for crops, and forecast of normal monsoon, brokerages, industry body SIAM and the company’s management predict that the current fiscal year should see a double-digit increase in for two-wheelers/motorcycles volumes. 

Multiple triggers

Among key reasons for the outlook is a normal monsoon. Two private weather forecasters, Skymet and Weather Risk Management Services, have indicated that monsoon rain, which starts in June,