Hero MotoCorp pours Rs 1,000 crore into Ather Energy amid stock slump
Hero MotoCorp is doubling down on electric vehicles by approving a Rs 1,000 crore investment in Ather Energy, a strategic pivot that comes as the motorcycle maker's own stock struggles with a six-month downtrend.
Hero MotoCorp has approved an additional investment of up to Rs 1,000 crore in electric vehicle manufacturer Ather Energy through a preferential allotment. The capital injection reaffirms the legacy motorcycle giant's long-term commitment to the EV maker, triggering a 6% rally in Ather Energy shares on Wednesday.
The strategic move highlights a divergence in market sentiment between the two companies. While Ather's equity surged, Hero MotoCorp's own shares posted only modest intraday gains of roughly 1%. By early afternoon, the stock was changing hands near Rs 4,901, pulling back from an earlier session peak of Rs 4,942.
This tepid reaction underscores the pressure Hero MotoCorp has faced in recent months. The stock has declined 2% over the past month, dropped 7% over the last quarter, and is down 13% on a six-month basis. Investors have seemingly expressed concern over the traditional combustion-engine manufacturer's ability to navigate the industry's transition to electric powertrains.
From a valuation standpoint, however, the market is still pricing in substantial profitability. Hero MotoCorp maintains a price-to-earnings ratio of 17.17, supported by earnings per share of Rs 286.96. The company's market capitalization stands at approximately Rs 98,604 crore.
Technically, the stock is showing tentative signs of stabilizing. During Wednesday's session, Hero MotoCorp traded above both its 20-day simple moving average of Rs 4,923.43 and its 20-day exponential moving average of Rs 4,916.54. The 7-day exponential moving average sits at Rs 4,920.73, indicating the shares are consolidating near recent levels.
Trading volumes reflected slightly heightened interest, with 680,383 shares exchanging hands by late morning. This exceeded the prior week's daily average of 658,821 shares. For institutional investors, the Ather investment signals that management is prioritizing long-term market share in the electric segment over short-term margin preservation, a calculated risk as the two-wheeler market evolves.
