Hero MotoCorp Outlook: After the raid by the Income Tax Department, the shares of Hero MotoCorp have lost about 6 percent.
Hero MotoCorp Outlook: Recently, due to the raids by the Income Tax Department on several premises of Hero MotoCorp, the world’s largest motorcycle company, its shares are selling. In the raids, the Income Tax Department has caught many financial irregularities, due to which its share price has fallen by about 6 percent in the last five days. Today (April 1) on BSE, it has closed at a price of Rs 2,241.80. In such a situation, investors have a dilemma whether to withdraw their money or keep the investment. Market experts believe that such investors should wait till the next quarters instead of taking losses in panic.
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Irregularities caught in the raid
The Income Tax Department has found illegal business expenses of Rs 800 crore, purchase of land in Delhi with ‘unaccounted’ cash of Rs 60 crore and the role of some shell companies in the raids of Hero MotoCorp and two other two groups. This raid took place on 23 March and then Hero MotoCorp had said that it is fully cooperating with the tax authorities in the investigation. The Income Tax Department had raided the offices of the company’s chairman and CEO Pawan Munjar, besides its offices in Delhi and Gurugram. The Central Board of Direct Taxes (CBDT) on Thursday (March 31) gave information about raids in a real estate group in Delhi NCR, an automobile manufacturer group and a company with chartered flights. On 23 March, more than 35 places were raided, in which information about bogus expenses came to the fore.
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Advice to investors to hold shares
According to Harsh Patidar, auto analyst at CapitalVia Global Research, investors should hold on to the stock for the next few quarters. Mid to long time investors should look at the fall in prices as a buying opportunity. According to Prashant Taapsee, Vice President (Research), Mehta Equities, the claims of the IT department should be taken seriously. Although the company has denied any irregularity and Taapsee believes that there is little chance of going down further than the price has fallen now, but investors should hold it at the stop loss of 2100. He said that we can increase the number of shares in the range of Rs 2150-2200 and if it crosses the resistance level of Rs 2340 then it can reach Rs 2463.
(Article: Harshita Tyagi)
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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