Shares of Hero MotoCorp jumped nearly 4% in intraday trade on Friday after the automobile major announced to hike prices of motorcycles and scooters from July 1 to partially offset rising input costs. The price will be increased up to ₹3,000, subject to the specific model and market.
Boosted by the price hike decision, Hero MotoCorp shares opened higher at ₹2,710, against the previous closing price of ₹2,670.85 on the BSE. During the session so far, the auto heavyweight gained as much as 3.6% to hit a high of ₹2,767.5, driven by strong volume. On the volume front, 0.21 lakh shares worth ₹5.9 crore changed hands over the counter as compared to the two-week average volume of 0.17 lakh stocks. The market capitalisation of Hero MotoCorp surged to ₹54,870.20 crore. In comparision, the BSE Sensex was trading 335 points higher at 52,601 levels at the time of reporting.
Technically, the stock traded in a “mildly bearish” range, higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The auto stock has risen 11% in a week, 4% over a month, and 11% since the beginning of the calendar year 2022. The stock has delivered a negative return of 5% in the last one year, while it has risen 15% over a six-month period.
The stock price got a boost after Hero MotoCorp decided to hike the prices of motorcycles and scooters from July 1, 2022, by up to ₹3,000, citing higher input costs. "Hero MotoCorp will make an upward revision in the ex-showroom prices of its motorcycles and scooters, with effect from July 1, 2022. The price revision will be up to ₹3,000. The exact quantum of increase will be subject to the specific model and market. The price revision has been necessitated to partially offset the steadily growing overall cost inflation, including commodity prices," the company says in a BSE filing on Thursday.
This is the second hike by the company in around two months. Before this, Hero MotoCorp announced a hike in the prices of its motorcycles and scooters by up to ₹2,000 from April 5.
The auto sector, which is one of the worst-hit industries by Covid, is grappling with various issues like chip shortage, supply chain constraints and high commodity prices. Like Hero MotoCorp, other auto companies like Mahindra & Mahindra, Maruti Suzuki, Hyundai, Mercedes-Benz, and others, have also increased prices to offset high input costs.