Hero Group

About Hero Group of Companies

The Hero Group is an Indian company that operates in various industries, including finance, renewable energy, education, and automobiles. Among the Hero Group companies, Hero MotoCorp is the flagship company and is one of the largest manufacturers of scooters and motorcycles in the world. The Group’s joint venture with Honda Group ended in 2010; since then, it has continued to achieve new heights. The company’s headquarters are situated in New Delhi.

History of Hero Group

The Hero Group is known for their two-wheeler manufacturing. However, the Group operates in various industries. The timeline of the Hero Group is as follows:

• Hero Group was founded by Brijmohan Lall Munjal in 1956 in Ludhiana.
• Initially, it was a small bicycle parts business, but later it started manufacturing full-fledged bicycles after receiving a license from the Indian government to manufacture cycles.
• By 1975, it became the largest manufacturer of bicycles in India. 
• The Group also received the Guinness Book of World Records as the largest manufacturer of bicycles in the World.
• In 1984, the company joined hands with the Japanese Motor Company Honda and started manufacturing motorcycles under the brand name Hero Honda Motors Limited.
• The Group’s products are affordable and fuel-efficient and due to this, they are famous among the Indian middle class customers.
• During the 1990s, it became the largest two-wheeler company by expanding its dealership network across the country.
• In 2010, the group ended its partnership with Honda and renamed itself as Hero MotoCorp Limited.
• Later, in 2010, they started diversifying their business globally, including countries like Africa, Latin America, the Middle East, and Asia.
• The company diversified its business into various sectors such as real estate, education, renewable energy, etc.
• In the 2020s, the Group entered into a partnership with Ather Energy and formed an EV brand named Vida.
• The Hero Group is one of the most successful business empires led by a family in India.

Business Segment of Hero Group

The key business segments of Hero Group are as follows:

• Automotive: The Hero Group is known for its two-wheeler manufacturing. Hero MotoCorp Limited is the Group company which is primarily involved in it. The company has also recently entered into two-wheeler EV manufacturing.
• Renewable Energy: The company has started their operation in the renewable energy sector over the last few years, through its subsidiary company known as Hero Future Energies.
• Financial Services: Hero Fincorp is the group company that operates in the NBFC sector, and provides two-wheeler loans, personal loans, etc. It also provides housing loans to different client segments.
• Real Estate: The Group develops residential, and commercial properties across Delhi, Ludhiana, Haridwar, etc., through its subsidiary company named as Hero Realty Private Ltd.
• Education: The Group operates various universities founded in the name of Munjal University, which offer educational courses in engineering, management, law, etc.
• Bicycles: The Hero Group is one of the world’s largest bicycle makers. It owns global brands like Firefox Bikes and HNF.
• Hospitality: Munjal Hospitality Private Limited is a subsidiary company of Hero Group which operates Hero Commercial Towers in Gurgaon.

Why Invest in Hero Stocks?

The major reasons why one should invest in Hero Group stocks are as follows:

• Diversified Business Model: The company has a diversified product portfolio, which includes renewable energy, automotive, real estate, etc. It reduces the Group’s overall business risk. 
• Largest Manufacturer: The Hero Group is one of the largest manufacturers of two-wheelers in the World.
• Export-Oriented Business: The company exports their products to various countries of the world, which helps it in maintaining a regular source of revenue.
• Legacy: The Group has a legacy of over 70 years, and over time, it has established itself as a prominent player in the two-wheeler industry.
• Dividend Yield: There are a few Hero Group companies which regularly declare dividends. Hence, these stocks are preferred by investors who wish to have a regular income.

How to Invest in Hero Group’s Listed Companies?

To invest in Hero Group stocks, one can follow the steps mentioned below:

• Identifying the Sector: The Hero Group primarily operates in the two-wheeler sector along with a few other sectors, such as realty, finance, etc. Hence, before investing in Hero Group, one needs to check and identify the sector and the associated company in which they wish to invest.
• Opening a Demat and Trading Account: To invest in Hero Group shares, one must open a demat and trading account. Now, one can open a free demat and trading account with Pocketful online.
• Adding Funds: To invest in Hero Group shares, one must add funds. One can easily transfer the funds using various online modes such as NEFT, RTGS, and UPI.
• Purchasing Stock: After the funds are added to your trading account, you can purchase the chosen stock of Hero Group. The buying order can be placed using the trading application provided by your stockbroker. 
• Portfolio Review: Once you have invested in Hero Group shares, you are required to keep a regular track of the same to book profits in a timely manner.

Who should invest in Hero Group Shares?

Investment in Hero Group stocks is suitable for the following investors:

• Long-term investor: An investor who wishes to invest for the long term can consider investing in Hero Group stocks. Historically, it has been seen that the Hero Group has posted significant returns in the long run.
• Auto-Sector Focus: Investors who are interested in investing in the automobile sector can consider investing in Hero Group stocks.
• Dividend Income: An investor who wishes to have a regular dividend income can invest in Hero Group stocks, as a few companies of Hero Group regularly declare dividends.

Features of Hero Stocks in India

The key features of the Hero Group stocks are as follows:

• Largest Two Wheeler Company: Hero MotoCorp is the largest manufacturer of two-wheelers not only in India, but also globally.
• Passive Income: Through regular dividends, it is an attractive investment option for investors who are seeking passive income.
• Large Cap Company: The Group has a strong track record, stable financials, and is a part of the top 50 companies of India.
• Domestic Market: A major source of the company’s revenue comes from the domestic market, and a smaller portion comes from the global revenue.
• Distributors: The Group has a strong network of distributors spread across the country, which helps them in increasing their market reach.

Risk of Investing in Hero Group Stocks

The significant risks faced by Hero Group stocks are as follows:

• Dependency: A significant portion of the group’s revenue comes from the two-wheeler segment and if there is any change in consumer preference, it can significantly impact the Group’s revenue and profitability.
• Cyclical Demand: The sales of two-wheelers in India are influenced by various factors such as household incomes, interest rates, etc. Hence, in case of any economic downturn, the Group’s performance will be impacted negatively.
• Regulatory Risk: Emission norms laid down by the regulating authorities can impact the company’s operations.
• Raw Materials Cost: An increase in the prices of raw materials used by the Hero Group in the production of two-wheelers can impact the profit margins of the Group companies.
• Volatility: The share prices of a few Hero Group companies can be volatile; hence suitable only for investors who can take risks.

Factors Affecting Hero Group Stocks

The major factors that affect the price of Hero Group stocks are as follows:

• Financial Performance: The financial performance of Hero Group companies can directly impact their returns. Consistently increasing profits can impact the stock price positively and vice-versa.
• Competition: The two-wheeler sector is highly competitive, as there are various domestic and global players operating in this industry. Hence, intense competition from these companies might impact the profit margin of the Hero Group companies.
• Economic Downturn: In case of any changes in consumer preference and an economic downturn, the demand for the two-wheeler will decrease, affecting the profits of the company negatively.
• Prices of Raw Materials: Any increase in prices of raw materials used by the various Hero Group stocks can directly impact the company’s performance.

How To Choose The Best Hero Group Stocks for Investing?

The Hero Group is primarily engaged in the two-wheeler sector. However, it also expanded its business in other industries; therefore, to choose the best stock among them, one can follow the steps mentioned below:

• Financial Performance: The company’s fundamentals of financial performance, such as revenue and profit growth, etc., are the key factors one should consider before choosing Hero Group stocks for investment.
• Market Share: Due to intense competition from both domestic and global players, the company’s market position needs to be analysed before choosing Hero Group stocks for investment.
• Key Parameters: There are various key parameters, such as P/E ratio, dividend yield, etc., which indicate the performance of Hero Group stocks; hence, before investing in it investors are required to analyse the same.
• Risk Profile: Few Hero Group stocks carry high risk and are highly volatile; therefore, choosing the Hero Group stocks requires proper analysis of your risk profile.

Advantages Associated with Hero Shares

The significant advantages associated with investing in Hero Group shares are as follows:

• Market Leader: Hero MotoCorp is one of the largest two-wheelers manufacturers in India, and dominates the market.
• Strong Balance Sheet: The Hero Group has a strong balance sheet, featuring low debt and healthy cash reserves.
• Strong Dealer Network: The Hero Group has a strong network of dealers spread across India, through which they can reach every rural and urban customer.
• EV Segment: The Group is gradually entering into the electric vehicle segment, and has made significant investments in Vida.

Disadvantages Associated with Hero Shares

The disadvantages associated with investing in Hero Group shares are as follows:

• Dependency on the Two-Wheeler Segment: Hero Group is primarily focused on the two-wheeler segment and any slowdown in this market due to rising usage of electric vehicles can impact the company’s performance.
• Competitive Market: There are various players in the market, such as Bajaj Auto, TVS, Honda, etc. Hence it increases the probability of price wars among the players and can impact their profit margins negatively.
• Input Cost: Any increase in input cost, such as steel, aluminium, etc., can impact the profit margin of the Hero Group companies.
• Domestic Market: The Group has a limited exposure in the global market. The company’s revenue primarily comes from the domestic market, hence, any downside in the domestic market could impact their profitability.

Performance Parameters for Hero Shares

There are various parameters based on which one can analyse the performance of hero group companies; a few of such parameters are mentioned below:

• Industry Outlook: The Hero Group primarily operates in the automotive industry. Hence, an investor is required to analyse the future growth potential of the auto sector before choosing Hero Group stocks for investment.
• Trading Volume: The trading volume of Hero Group shares requires close monitoring, as the trading volume can be on the lower side on some days due to its high price, which might make it difficult for investors to execute their trades.
• Financial Performance: The financial performance of Hero Group companies plays a vital role in choosing these stocks for investment. The higher the profit, the higher the growth potential.
• Key Ratios: The key financial ratios, such as the liquidity ratio, solvency ratio, plays a major role in choosing the company for investment.
• Competition: The market competition plays an important role as the high competition from the domestic and global players might impact the company’s profitability and market share negatively.

Hero Group represents the legacy of India’s two-wheeler industry, starting as a small bicycle company to becoming the world’s largest two-wheeler manufacturer. The Group companies have a strong brand recognition, not only in the domestic market but also in the global market. Whether it is about the adoption of new technology and managing an extensive distribution network, the Group companies have performed exceptionally well. With the growing potential of the Indian economy, the group has recently ventured into the EV segment with its partnership with Ather Energy and establishment of Vida. However, investment in Hero Group stocks contains certain risks such as increasing cost of raw material, competition, etc. Therefore, an investor should consider their risk profile before making any investment in Hero Group shares.

One can open a free demat account with Pocketful and start investing in Hero Group stocks, as Pocketful provides an advanced trading platform equipped with various technical tools and fundamental metrics, where you can trade and invest without paying any brokerage on equity delivery.