COMPANY: HERO MOTORCORP

INDEX: NIFTY 50
PERIOD: 2014-2017
Date Adj Close nifty Return Adj Close Return Adj Close Return
Beta Date
50 Index Stock Stock nifty 50 Index
### 8477.349609 -1.29% 2855.479 -3.78% 0.771401 ### 7856.55 -1.08%
### 8588.25 0.59% 2967.733 -1.24% ### 7942.7 2.07%
### 8538.299805 3.82% 3005.073 1.99% ### 7781.9 2.25%
### 8224.099609 -0.01% 2946.518 1.65% ### 7610.45 -1.95%
### 8225.200195 0.30% 2898.618 -0.72% ### 7761.95 -1.26%
### 8200.700195 -2.32% 2919.645 -0.05% ### 7861.05 -1.07%
### 8395.450195 1.34% 2921.248 3.54% ### 7946.35 4.54%
1/4/2015 8284.5 -2.69% 2821.44 3.26% 1/3/2016 7601.35 2.20%
### 8513.799805 -3.64% 2732.288 1.22% ### 7437.8 0.21%
### 8835.599609 0.30% 2699.38 -0.09% ### 7422.45 -1.87%
### 8808.900391 1.71% 2701.926 3.21% ### 7563.55 0.99%
2/1/2015 8661.049805 -1.64% 2617.817 -2.68% ### 7489.1 7.28%
2/8/2015 8805.5 -0.32% 2690.045 7.30% 2/7/2016 6980.95 -3.19%
### 8833.599609 -0.12% 2507.119 -0.51% ### 7210.75 2.57%
### 8844.599609 -1.04% 2520.037 2.42% ### 7029.75 -6.09%
3/1/2015 8937.75 3.35% 2460.492 -0.02% ### 7485.35 -0.33%
3/8/2015 8647.75 0.90% 2461.01 0.00% 3/6/2016 7510.2 -1.24%
### 8570.900391 2.75% 2460.963 1.31% ### 7604.35 -1.45%
### 8341.400391 -2.85% 2429.093 -3.00% ### 7716.5 0.04%
### 8586.25 -2.21% 2504.243 2.79% ### 7713.05 2.09%
4/5/2015 8780.349609 2.03% 2436.353 7.19% 4/3/2016 7555.2 -3.76%
### 8606 3.62% 2272.899 2.45% ### 7850.45 -0.62%
### 8305.25 1.51% 2218.493 1.03% ### 7899.3 0.63%
### 8181.5 -0.12% 2195.957 1.23% ### 7849.8 1.50%
5/3/2015 8191.5 -0.86% 2169.319 -9.05% 5/1/2016 7733.45 -1.04%
### 8262.349609 -2.32% 2385.294 -2.83% 5/8/2016 7814.9 0.84%
### 8458.950195 0.30% 2454.834 -3.46% ### 7749.7 -4.99%
### 8433.650391 3.93% 2542.903 4.62% ### 8156.65 -0.78%
### 8114.700195 1.65% 2430.507 1.81% ### 8220.8 0.62%
6/7/2015 7982.899902 -2.94% 2387.193 -1.88% 6/5/2016 8170.05 0.00%
### 8224.950195 -1.86% 2432.866 0.48% ### 8170.2 1.01%
### 8381.099609 -1.22% 2421.186 -1.45% ### 8088.6 -2.88%
### 8484.900391 1.49% 2456.895 0.20% ### 8328.35 0.06%
7/5/2015 8360.549805 -2.90% 2452.032 -2.94% 7/3/2016 8323.2 -2.55%
### 8609.849609 1.04% 2526.264 -3.32% ### 8541.4 0.00%
### 8521.549805 -0.13% 2613.034 2.15% ### 8541.2 -1.13%
### 8532.849609 -0.37% 2558.016 0.78% ### 8638.5 -0.51%
8/2/2015 8564.599609 0.54% 2538.135 -1.87% ### 8683.15 1.06%
8/9/2015 8518.549805 2.63% 2586.383 6.16% 8/7/2016 8592.15 -0.86%
### 8299.950195 3.72% 2436.299 6.52% ### 8666.9 1.10%
 ### 8001.950195 4.53% 2287.12 4.70% ### 8572.55 -2.69%
### 7655.049805 -1.72% 2184.378 -2.23% ### 8809.65 -0.64%
9/6/2015 7789.299805 -2.41% 2234.152 -3.52% 9/4/2016 8866.7 0.99%
### 7981.899902 1.44% 2315.63 1.96% ### 8779.85 -0.59%
### 7868.5 -1.04% 2271.006 -1.26% ### 8831.55 2.56%
### 7950.899902 -2.92% 2299.945 -5.96% ### 8611.15 -0.99%
### 8189.700195 -0.59% 2445.643 -0.74% ### 8697.6 1.33%
### 8238.150391 -0.69% 2463.903 -0.46% ### 8583.4 -1.26%
### 8295.450195 2.85% 2475.393 0.57% ### 8693.05 0.64%
### 8065.799805 1.40% 2461.424 -2.21% ### 8638 2.42%
### 7954.299805 2.47% 2517.158 0.93% ### 8433.75 1.66%
### 7762.25 2493.844 ### 8296.3

CAPM:
Long -term govt bond 7.03%
Beta 1.0029
Market risk premium 10%

CAPM 17.06%

Cost of debt Current liabilities + Long term liabilities

Current liabilities 4094
Long term liabilites 490
Total debt(in.cr) 4584
Interest cost(in.cr) 28
Cost of debt 0.61%
Risk premium 1%
1.61%
After tax cost of debt 1.13%
(tax rate 30%)
Adj Close Return Adj Close Return Adj Close Return
Beta Date Beta
Stock Stock nifty 50 Index Stock Stock
2443.737 -5.24% 1.282581 ### 8114.3 0.34% 2972.502 -4.33% 0.798646
2578.755 3.31% ### 8086.8 -2.12% 3106.882 -2.86%
2496.133 3.67% ### 8261.75 1.50% 3198.323 4.78%
2407.789 -4.46% ### 8139.45 1.92% 3052.476 2.89%
2520.304 -1.97% ### 7985.75 -2.44% 2966.794 -0.12%
2571.079 0.39% ### 8185.8 -0.70% 2970.258 -0.78%
2561.21 7.89% 1/1/2017 8243.8 -1.86% 2993.582 0.69%
2373.938 2.55% 1/8/2017 8400.35 0.61% 2973.088 -0.13%
2314.916 -6.32% ### 8349.35 -3.38% 2977.041 -5.14%
2471.055 1.01% ### 8641.25 -1.14% 3138.306 0.06%
2446.406 -0.74% ### 8740.95 -0.60% 3136.5 -1.67%
2464.618 3.84% 2/5/2017 8793.55 -0.32% 3189.784 5.88%
2373.557 -8.02% ### 8821.7 -1.32% 3012.758 -2.82%
2580.424 5.90% ### 8939.5 0.47% 3100.149 -2.94%
2436.633 -9.89% ### 8897.55 -0.41% 3193.931 -1.15%
2704.048 0.80% 3/5/2017 8934.55 -2.46% 3231.21 -1.05%
2682.594 -0.62% ### 9160.05 0.57% 3265.415 -2.47%
2699.423 -1.41% ### 9108 -0.72% 3348.003 4.76%
2737.946 -4.07% ### 9173.75 -0.27% 3195.941 0.21%
2854.222 1.21% 4/2/2017 9198.3 0.52% 3189.345 -0.29%
2820.032 -7.38% 4/9/2017 9150.8 0.34% 3198.47 0.66%
3044.758 5.04% ### 9119.4 -1.98% 3177.342 -3.48%
2898.713 3.44% ### 9304.05 0.20% 3291.811 -1.72%
2802.333 0.25% ### 9285.3 -1.23% 3349.293 -4.66%
2795.466 -0.77% 5/7/2017 9400.9 -0.29% 3512.911 -0.84%
2817.034 0.55% ### 9427.9 -1.74% 3542.818 -1.29%
2801.655 -3.52% ### 9595.1 -0.60% 3589.191 -6.01%
2903.984 -4.57% ### 9653.5 -0.15% 3818.673 1.84%
3042.969 2.50% 6/4/2017 9668.25 0.84% 3749.585 -0.09%
2968.786 1.29% ### 9588.05 0.14% 3753.008 3.37%
2930.969 -0.93% ### 9574.95 0.57% 3630.554 -1.11%
2958.388 -4.00% ### 9520.9 -1.50% 3671.471 -0.28%
3081.512 0.58% 7/2/2017 9665.8 -2.23% 3681.65 -2.03%
3063.86 -2.35% 7/9/2017 9886.35 -0.29% 3758.05 2.07%
3137.657 -0.51% ### 9915.25 -0.99% 3682 1.42%
3153.857 1.80% ### 10014.5 -0.52% 3630.3 -8.25%
3098.05 -6.99% ### 10066.4 3.66% 3956.55 3.01%
3330.949 4.02% 8/6/2017 9710.8 -1.29% 3840.9 -3.66%
3202.313 -1.39% ### 9837.4 -0.20% 3986.7 2.68%
3247.578 1.60% ### 9857.05 -1.18% 3882.65 -4.11%
3196.414 -7.63% ### 9974.4 0.40% 4048.95 2.35%
3460.311 -1.20% 9/3/2017 9934.8 -1.49% 3956.05 1.75%
3502.383 0.91% ### 10085.4 1.21% 3888 2.55%
3470.95 0.70% ### 9964.4 1.80% 3791.15 0.44%
3446.979 3.47% ### 9788.6 -1.91% 3774.55 1.91%
3331.385 -1.74% ### 9979.7 -1.85% 3703.95 -1.59%
3390.426 -0.21% ### 10167.45 0.21% 3763.85 0.76%
3397.648 3.62% ### 10146.55 -1.71% 3735.6 -1.35%
3278.834 0.24% ### 10323.05 -1.24% 3786.65 2.65%
3271.026 1.95% ### 10452.5 1.27% 3689.05 2.33%
3208.618 10.51% ### 10321.75 1.33% 3605.1 -1.37%
2903.556 ### 10186.6 3655.2
Return Return Beta
Index Stock consolidated
-1.29% -3.78% 1.0029510217
0.59% -1.24%
3.82% 1.99%
-0.01% 1.65%
0.30% -0.72%
-2.32% -0.05%
1.34% 3.54%
-2.69% 3.26%
-3.64% 1.22%
0.30% -0.09%
1.71% 3.21%
-1.64% -2.68%
-0.32% 7.30%
-0.12% -0.51%
-1.04% 2.42%
3.35% -0.02%
0.90% 0.00%
2.75% 1.31%
-2.85% -3.00%
-2.21% 2.79%
2.03% 7.19%
3.62% 2.45%
1.51% 1.03%
-0.12% 1.23%
-0.86% -9.05%
-2.32% -2.83%
0.30% -3.46%
3.93% 4.62%
1.65% 1.81%
-2.94% -1.88%
-1.86% 0.48%
-1.22% -1.45%
1.49% 0.20%
-2.90% -2.94%
1.04% -3.32%
-0.13% 2.15%
-0.37% 0.78%
0.54% -1.87%
2.63% 6.16%
3.72% 6.52%
 4.53% 4.70%
-1.72% -2.23%
-2.41% -3.52%
1.44% 1.96%
-1.04% -1.26%
-2.92% -5.96%
-0.59% -0.74%
-0.69% -0.46%
2.85% 0.57%
1.40% -2.21%
2.47% 0.93%
-1.08% -5.24%
2.07% 3.31%
2.25% 3.67%
-1.95% -4.46%
-1.26% -1.97%
-1.07% 0.39%
4.54% 7.89%
2.20% 2.55%
0.21% -6.32%
-1.87% 1.01%
0.99% -0.74%
7.28% 3.84%
-3.19% -8.02%
2.57% 5.90%
-6.09% -9.89%
-0.33% 0.80%
-1.24% -0.62%
-1.45% -1.41%
0.04% -4.07%
2.09% 1.21%
-3.76% -7.38%
-0.62% 5.04%
0.63% 3.44%
1.50% 0.25%
-1.04% -0.77%
0.84% 0.55%
-4.99% -3.52%
-0.78% -4.57%
0.62% 2.50%
0.00% 1.29%
1.01% -0.93%
-2.88% -4.00%
0.06% 0.58%
-2.55% -2.35%
 0.00% -0.51%
-1.13% 1.80%
-0.51% -6.99%
1.06% 4.02%
-0.86% -1.39%
1.10% 1.60%
-2.69% -7.63%
-0.64% -1.20%
0.99% 0.91%
-0.59% 0.70%
2.56% 3.47%
-0.99% -1.74%
1.33% -0.21%
-1.26% 3.62%
0.64% 0.24%
2.42% 1.95%
1.66% 10.51%
0.34% -4.33%
-2.12% -2.86%
1.50% 4.78%
1.92% 2.89%
-2.44% -0.12%
-0.70% -0.78%
-1.86% 0.69%
0.61% -0.13%
-3.38% -5.14%
-1.14% 0.06%
-0.60% -1.67%
-0.32% 5.88%
-1.32% -2.82%
0.47% -2.94%
-0.41% -1.15%
-2.46% -1.05%
0.57% -2.47%
-0.72% 4.76%
-0.27% 0.21%
0.52% -0.29%
0.34% 0.66%
-1.98% -3.48%
0.20% -1.72%
-1.23% -4.66%
-0.29% -0.84%
-1.74% -1.29%
-0.60% -6.01%
-0.15% 1.84%
 0.84% -0.09%
0.14% 3.37%
0.57% -1.11%
-1.50% -0.28%
-2.23% -2.03%
-0.29% 2.07%
-0.99% 1.42%
-0.52% -8.25%
3.66% 3.01%
-1.29% -3.66%
-0.20% 2.68%
-1.18% -4.11%
0.40% 2.35%
-1.49% 1.75%
1.21% 2.55%
1.80% 0.44%
-1.91% 1.91%
-1.85% -1.59%
0.21% 0.76%
-1.71% -1.35%
-1.24% 2.65%
1.27% 2.33%
1.33% -1.37%
 Particulars 2013-14 2014-15 2015-16 2016-17
Operating profit 3284 3542 4447 4634
EBIT(1-t) 2298.8 2479.4 3112.9 3243.8
(+) Depreciation 1107 539 441 492
3405.8 3018.4 3553.9 3735.8
(-) Changes in NWK 418 492 488 1473
Free cash flow 2987.8 2526.4 3065.9 2262.8
2988 2526 3066 2263

Growth rate 21% -26%

Average growth rate -5%

Forecasting Yr 1 Yr2 Yr3 Yr4

2399.7 2279.715 2165.729 2057.443
Perpetuity growth 4%
rate
Terminal value 15564.727979
Discounted Cash
flow
 Tax rate 0.3

NOTES:

Changes in net working capital is taken from the balance sheet for
the respective years

WACC :

For calculation of WACC, assuming equal

weights given to both debt and equity
Yr5
1954.571

r 17.06%

1.13%
after tax cost of debt

WACC 9.10%

Working capital CA-CL

Changes in Working
capital
2012-2013 2013-2014 2014-15 2015-16 2016-17
Current assets 4830 5077 5282 5935 7453
Current liability 4341 4170 3883 4048 4093
Changes in WK 418 492 488 1473