Hero MotoCorp shares rise after ₹525 crore investment in Euler Motors

Shares of Hero MotoCorp  advanced over 3 per cent during Friday's session after it announced its foray into the three-wheeler category through an investment of ₹525 crore in Euler Motors Private Limited. 

 

Hero MotoCorp's stock rose as much as 3.1 per cent during the day to ₹3,711.9 per share. The stock pared gains to trade 2.7 per cent higher at ₹3,695.9 apiece, compared to a 0.52 per cent advance in Nifty 50 as of 10:38 AM. 

 

Shares of the motorcycle maker extended gains to their second day while they have fallen 10.88 per cent this year, compared to a 1,7 per cent fall in the benchmark Nifty 50. The company's stock currently trades at over 15-month low and have risen by nearly 7 per cent from the lows of ₹3,466 earlier this month. Hero MotoCorp has a total market capitalisation of ₹73,670.9 crore.

 

 

The company's board approved the investment of ₹525 crore in multiple tranches on Thursday to foray into the three-wheeler space, according to an exchange filing. This investment will help gain a strong foothold in the fast-growing electric three-wheeler market, where electric vehicles are projected to account for 35 per cent of total sales in the near future, the statement said.  

 

Euler, having presence in 30 cities in the country, is engaged in the business of designing, manufacturing, selling and servicing of electric three and four-wheeler vehicles. "As we strengthen and diversify our emerging mobility portfolio, this strategic investment allows Hero MotoCorp to venture into a rapidly growing electric three and four-wheeler market, while unlocking adjacent business opportunities and continuing to cement its leadership in the future of sustainable mobility," Pawan Munjal, executive chairman of Hero MotoCorp said in the statement.  

 

The proposed investment is expected to be completed by April 30, 2025 for a full cash consideration. For the financial year ended March 31, 2024, Euler’s total turnover stood at ₹172 crore. 

 

The company's profit increased 12 per cent to ₹1,203 crore in the three months to December 31. Hero's motorcycle and scooter sales grew just 0.3 per cent in the quarter, marking their weakest growth since July-September 2022. The two-wheeler maker now expects double-digit revenue growth next fiscal riding on the back of continued investments on new products and segments.