A Nifty50 stock, which gave a dividend of Rs 165 in 2025, translated at 8,250 per cent on a face value of Rs 2 each, is likely to be excluded from the benchmark index. Interestingly, the stock is also facing the risk of being downgraded into the midcap category upon its exclusion from the benchmark index.
According to a report from Nuvama Alternative Research, shares of Hero MotoCorp, may be classified as a midcap stock. It is currently a part of the Nifty50 index. Hero MotoCorp, which settled at Rs 4,320 on Thursday, rising nearly 2 per cent for the day. The company commanded a total market capitalization of more than Rs 86,400 crore for the day.
Association of Mutual Funds in India (AMFI) may set the large-cap cut-off to Rs 91,600 crore and the mid-cap threshold to be around Rs 30,700 crore, says Nuvama’s report. AMFI will announce the stock re-categorization in the first week of July 2025 and may highlight the market cap changes in large, mid and small cap.
The cut-off period for NSE’s indices rejig ends in July, and the official announcement is expected in the latter half of August, with index adjustments effective September 29, 2025, said Nuvama Alternative Research. “While much of the negative sentiment appears to be priced in, we believe any further downside will be more pronounced around the adjustment period,” it added.
Shares of Hero MotoCorp have plunged more than 30 per cent from its 52-week high at Rs 6,245. The stock is down 23 per cent in the last one year, while it has remained flat in the last one month and six month period. The stock has underperformed in the last five years as well, rising only 58 per cent.
However, brokerage firms continued to remain positive on the stock. The company has recently launched the Vida VX2 electric scooter, introducing a Battery-as-aService (BaaS) model to lower EV ownership costs and drive adoption. Priced from Rs 59,490 (BaaS) and Rs 99,490 (with battery), the VX2 offers two variants.
“We expect Hero Moto to see an increase in market share in the near term, but as new models are launched by other OEMs (in BaaS and without BaaS) we will see a moderation in market share. While the BaaS model may see good early adoption, we do not expect it to be a new normal unless there are changes to the plan structures to attract more consumer segments,” said Choice Institutional Equities.
“Our analysis suggests that in the long term, the overall cost of ownership for customers with medium to high average daily usage exceeds the benefit received from the lower upfront cost. We continue to maintain our ‘buy’ rating with a target price of Rs 5,100 (PE of 17 times) on FY27E EPS,” it added.
The new models are competitively priced and compare best with Bajaj’s Chetak. Hero Moto aims to double volumes with the VX2 and target a market share of 12–15 per cent by end-FY26E, with a goal to rank among the top three E-2W OEMs by FY27E. Vida is currently available at over 500 touchpoints; plans afoot for further expansion, said Nuvama Institutional Equities with a ‘buy’ rating and a target price of Rs 5,100.
Our analyst expects Hero MotoCorp to show healthy volume growth ahead led by rural recovery, traction in entry level bikes by first time buyers, and increasing market share in 125CC+ segment and scaling up the EV portfolio, said Mirae Asset Capital Markets. “As a long-term strategy road map such as showroom revamp, upgradation of portfolio will support volumes to grow better than industry,” it added with an ‘add’ rating a target price of Rs 4,888 on the stock.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
