Hero MotoCorp’s revenue grew but net profit slipped for the July to September quarter due to increased expenses and a slight dip in sales, following which investors on Dalal Street turned cautious on the two-wheeler maker’s stock on Friday.

Hero Moto’s shares declined more than 2 percent intraday on BSE even as analysts have given it a ‘buy’ rating.’

Brokerage firm Jefferies has set a target price of Rs 3,000 per share on the stock, noting that the company’s EBITDA for the second quarter of the fiscal fell 3 percent annually but was in line with estimates. The two-wheeler maker’s gross profit per vehicle and EBITDA per vehicle has gone up 7-8 percent sequentially, it pointed out.

Motilal Oswal too has a ‘buy’ call on Hero Moto’s stock saying the two-wheeler’s revenue grew 7 percent year-on-year despite flat volume growth. It said the higher realisation of 8 percent YoY drove the revenue growth.

Even as the company’s gross margin expanded to 28 percent owing to stable commodity costs and price hikes, it was still lower-than-estimated gross margin, leading to EBITDA margins declining 120bp YoY to 11.4 percent.

Niranjan Gupta, CFO Hero MotoCorp, said, “ The global macro headwinds may keep the playfield a bit uncertain, and navigating the same over the next few quarters will be important. However, as the commodities cool off, and the rate cycle reaches its peak, the medium-term outlook for the Indian auto industry appears quite encouraging.”

Also Read | Gogoro aims to remove range anxiety as riders can go up to 100 kms with our tech: Founder

He added that consumer confidence is coming back, which augurs well for growth momentum moving forward. According to Gupta, the results reflect financial discipline, focus on cost savings, capital allocation as well as premiumisation of portfolio.

Catch latest stock market updates on CNBCTV18.com's blog here