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Informist, Thursday, Aug. 7, 2025

By Anand JC and Akash Mandal

NEW DELHI/MUMBAI – The management of Hero MotoCorp Ltd. on Thursday expressed confidence about the upcoming festival season spurring demand for two-wheelers in India and said it expects the industry to grow higher in the coming months. While April and May saw demand in rural areas outpacing urban areas, the trend reversed in June and July, in part due to early monsoon.

Hero MotoCorp reiterated its expectation of a mid-single-digit growth for the industry in 2025-26 (Apr-Mar), despite the recent aberration. Retail sales of two-wheelers grew 3.0-3.5% in the June quarter, lower than the company would've liked. "...but we feel that it's a postponement (of purchases) that should likely come back in the festival (season) and hence should be back to that 6-7% growth," the company said. 

The company plans to launch two new two-wheelers, including a new motorcycle with a 125 cubic centimetre-capacity, in the September quarter. "They are new value propositions for the customers, exciting interventions in the technology space and of all the things we expect new customers to be driven into our showrooms, these new launches," the company said.

Hero MotoCorp currently has two 440cc bikes in its portfolio, the Harley Davidson X440 and the Maverick 440. The company plans to expand the Harley Davidson line-up and will add one new product in the ongoing quarter, and one more subsequently in this financial year. 

The two-wheeler giant disclosed its June quarter earnings on Wednesday. It reported a net profit of INR 11.26 billion on revenues of INR 95.79 billion. Despite the year-on-year contraction in revenue, the company managed to keep its earnings before interest, tax, depreciation, and amortisation margin around 14.4%, the same level as last year. 

This gain was partly driven by a 100-basis-point improvement in its gross margin, which was due to its product mix and price increase. The company had said its EBITDA margin would hover at 14-16%, but it now expects to operate at the lower end of its expectation in the short term.

The company sold 1.37 million two-wheelers during the quarter, down over 10% from 1.53 million in the year-ago quarter and around a per cent from 1.38 million in the March quarter. The average selling price of its two-wheelers grew 6% on year in the June quarter. 

Hero MotoCorp's management said the rare earth magnet shortage is a challenge for the company, just like it is for the industry. It has enough inventory of the key input material for the ongoing quarter for both fuel-run and electric two-wheelers. "We continue to work on alternatives, and this is something that we will try and see that we circumvent the problem," it said.

"Our EV business expansion is gaining significant momentum, achieving a share of 7% during the quarter, which further improved to 10% in July," Hero MotoCorp said. The company operates its electric scooter operations under the Vida brand. It received certification for the production-linked incentive scheme for its Vida V2 Pro in July, and is working on getting approvals for its other models.

"With our product launches and as we amplify our brand-building initiatives, we expect to grow our EV share in the coming quarters," the management said.

Addressing the weakness in the performance of its financing subsidiary Hero FinCorp Ltd., the company said it was impacted by high credit costs and non-performing assets in the June quarter. "But that's the trend we are seeing across the industry. And with interest rates falling, we are seeing improvement in credit quality and collection efficiency. We are confident that going forward, HFCL (Hero FinCorp) will go back to profitable growth," it said.

At 1214 IST, shares of India's biggest two-wheeler maker traded 1.9% higher at INR 4,558.20 per share on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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