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Informist, Friday, Nov. 14, 2025

 

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--Hero MotoCorp: Expect retail momentum to sustain even after festival season
--CONTEXT: Comments by Hero MotoCorp's mgmt in post-earnings analyst call
--Hero MotoCorp: Have seen strong recovery in sales of 100cc two-wheelers
--Hero MotoCorp: Expect two-wheeler sales to rise 8-10% in Oct-Mar
--Hero MotoCorp: Expect replacement demand to return as sentiment improves
--Hero MotoCorp: See FY26 2-wheeler sales growth 5-6%, in line with guidance
--Hero MotoCorp: Seeing strong demand across portfolios in 100cc category
--Hero MotoCorp: Commodity costs were flat in Q2, will see some pressure Q3

 

By Anand JC and P. Madhu Kumar

 

MUMBAI – Hero MotoCorp Ltd. expects India's two-wheeler industry sales to grow 5-6% on year in 2025-26 (Apr-Mar), in line with its previous guidance, the company told analysts in a post-earnings conference call on Friday. The company did not increase sales guidance for the industry, despite the cut in goods and services tax on two-wheelers with engine capacity not exceeding 350 cubic centimetres to 18% from 28%  effective Sept. 22.

 

The two-wheeler industry grew at 2%  between April and September. Including October and November, the industry grew to almost 12% for the financial year so far. "It (two-wheeler industry) will taper down for sure because this (was because of) festive spike," the company told analysts. "We anticipate that overall, from a full-year perspective, we'll be not far away from the growth estimate that we had given at the beginning of the year, which was close to around 5-6%," a top executive of the company said.

 

Based on historical data, Hero MotoCorp expects the ongoing momentum to likely sustain because of policy measures and seasonal benefits seen in recent years. The company expects two-wheeler industry sales to grow 8-10% on year in the second half of FY26, much better than the first half.  

 

Hero MotoCorp launched 12 new two-wheeler models and variants during the festival season, a record high for the company. "This strong product portfolio expansion and GST reforms led to record sales of nearly 1 million units on Vahan and a market share gain of 370 basis points year-on-year to 31.6% in October," the company said. The average selling price of Hero MotoCorp's two-wheelers increased 4.2% year-on-year and 2.4% quarter-on-quarter, driven by product mix and pricing adjustments. 

 

Overseas, its international business recorded despatches growth of 77% in the September quarter, led by growth in Bangladesh, Nepal, Sri Lanka and Colombia.

 

Hero MotoCorp said the industry as a whole did not offer as many discounts during the reporting quarter. Additionally, the company is instead focusing on offering new products and building its brand. The company's advertisement costs grew 10% in the first half of FY26.

 

Focus Areas 

Hero MotoCorp said it will focus on the scooter segment and two-wheelers with a 100cc engine capacity. "If the festive trends are anything to go by, we see a very strong bounce back on the 100cc category. That's where we have seen a very strong demand across Splendor and Passion portfolio," the company said. Not only has the company seen more fence-sitters buying up these two-wheelers, Hero MotoCorp also expects replacement demand cycles to pick up.

 

The company also expects scooters to continue to do well across markets, as has been the case in recent years. "Bulk of our market share gains have come primarily from the strong scooter markets like Kerala, Karnataka, Maharashtra, and Gujarat," the company said. 

 

EV Operations

Hero MotoCorp's electric vehicle business under Vida is yet to report a profit. The company said that its priority right now would be to focus on investing in the brand and building its electric vehicle portfolio. 

 

"There will be focus and relentless focus on optimising our cost and bringing in focus across the cost element. And we will continue to leverage benefits like the PLI (production-linked incentive scheme) in order to bring the EV business overall into a more positive roadmap," an executive at Hero MotoCorp said. "At a product contribution level, we are still in a negative zone. So, that's something that is the second priority we have in terms of really getting to a product contribution neutral level," the executive said.

 

Hero MotoCorp hopes these measures will help improve the electric vehicle business' gross margin. Thereafter, it would bank on increasing sales volume to help the profitability of the business. 

           

Commodity Pressures

Hero MotoCorp disclosed its September quarter earnings late Thursday. It reported a net profit of INR 13.93 billion on revenues of INR 121.26 billion. The company's expenses grew 15% on year to INR 105.06 billion for the reporting quarter. Of this, its cost of raw materials consumed grew 15% on year to INR 79.76 billion.

 

The company said commodity costs were largely flat during Jul-Sept. "We have seen the aluminium prices come up, but at the same time, the steel prices have actually come down during the quarter. And I think our LEAP programme, which is the cost-saving programme, is really helping us keep the commodities actually flat," an executive at Hero MotoCorp said. The company expects to see some inflationary pressure in the December quarter stemming from aluminium prices, but broadly, it expects commodity inflation to remain range-bound within a percent or two.

 

At 1235 IST, shares of the company traded 1.3% higher at INR 5,579 on the National Stock Exchange. End

 

Edited by Deepshikha Bhardwaj

 

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