IN : Hero MotoCorp - Cost control and pricing power impress

The 4QFY21 EBITDA dip of 14% qoq to Rs12.1bn was more than we estimated. But lower other income led to 20% qoq EPS dip, disappointing us. We maintain EBITDA as industry price discipline should help pass-on cost pressure. We lower other income, leading us to cut EPS 2.5% for FY22F-23F. Lower DCF-based TP for short-term demand challenges. Maintain Add rating for relatively attractive valuation to peers and dividend yield of ~5%.

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