two wheeler chief Hero Motocorp Limited, Electric scooter booking has started VIDA V1, Rupee. 1.45 lakh to . Available at ex-showroom price of 1.59 lakh, the Vida V1 model and its two variants V1 Pro and V1 Plus are equipped with a 3.4-3.9 kWhr battery with a 6 kW motor.
But Hero MotoCorp investors are hardly enthused, with shares on the NSE falling nearly 3% in early deals on Monday. Most have blamed the high product pricing.
Analysts say that while the product offers some industry-leading features, its position may worsen in the upper end segment of the scooter market.
Analysts at Kotak Institutional Equities said, “Given that the company has launched its EV (electric vehicle) product at a premium price point (above most competitors), we are confident that the product will capture a limited market share in the EV scooter segment. will do.” In a report dated 7 October.
The high upfront cost of EVs is one of the barriers to rapid adoption, which makes the company’s pricing strategy questionable, the report said.
In a press release on October 7, the company said that the VIDA V1 is being launched in a phased manner, with the product being available for retail sale in Delhi, Bengaluru and Jaipur and later in other cities. Delivery will start from the second week of December.
Note that electric two wheelers (E2Ws) have got a boost from increased government incentives. According to analysts at Jefferies India, E2W’s share of total 2W registrations has increased from 5% in Q2 FY22 to 2% in FY22. The research house expects this number to increase to 9% by FY25.
The Jefferies report states, “While new companies have entered the space and launched new products, we believe existing companies are also making a good comeback and have a strong presence in their own brands as well as their own sales.” And there is an opportunity to leverage the service network.” ,
Meanwhile, Hero MotoCorp’s stock has gained just 3% so far this calendar year. In comparison, the sector index Nifty Auto has gained about 14 per cent.
“The current valuation (at 14.3x FY24E EPS) is largely all negative factors: weak demand, loss of market share and lower expectations from electric vehicles,” analysts at Motilal Oswal Financial Services Ltd said in a report on October 8. EPS is earnings per share.
However, any improvement in demand (on a very low basis) and/or reasonable success for an EV launch could be a near-term stock price catalyst, the report said.
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