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    Hero Motocorp

    HEROMOTOCO
    Automobile and Auto Components·19 Nov 2025
    Management Summary

    Hero Motocorp delivered a robust Q2 FY26, achieving record revenue, EBITDA, and PAT, fueled by a strong festive season and significant market share gains across its ICE and EV segments. The company's VAHAN market share saw substantial expansion in October, and its EV business recorded its highest-ever quarterly market share. Management anticipates the 2-wheeler industry to grow 8-10% in H2 FY26, with Hero positioned to outperform the market.

    Highlights

    5

    • Q2 FY26 Revenue reached a record ₹12,126 crores, reflecting a strong 16% year-on-year growth.

    • Highest ever quarterly EBITDA of ₹1,823 crores, marking a 20% growth, driven by cost efficiencies and mix improvement.

    • ICE business EBITDA margin improved significantly to 17.7%, an increase of 121 basis points year-on-year.

    • VAHAN market share expanded by 3.7% year-on-year to 31.6% in October, indicating strong competitive performance.

    • EV business achieved its highest ever quarterly market share of 11.7%, up 6.8% year-on-year, led by Vida VX2.

    Concerns

    2

    • EV business is currently in a negative zone at a product contribution level, though management is focused on achieving neutrality.

    • Expectation of 1-2% commodity inflation in Q3 FY26, which could impact margins.

    Key financials

    Metrics

    10

    Periods

    2

    Q2 FY26

    6
    • Revenue
      ₹12,126 Cr
      YoY+16%
    • EBITDA
      ₹1,823 Cr
      YoY+20%
    • PAT
      ₹1,393 Cr
      YoY+16%
    • ICE Business EBITDA Margin
      17.7%
      YoY+1.2%
    • Overall EBITDA Margin
      15%
      YoY+0.5%

    H1 FY26

    4
    • Revenue
      ₹21,705 Cr
      YoY+5.3%
    • EBITDA
      ₹3,205 Cr
      YoY+7.7%
    • PAT
      ₹2,519 Cr
      YoY+8%
    • Operating Cash Generated
      ₹4,111 Cr

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Liquidity disclosed

    Operating cash generated in first half is 4,111 crores. Post the festive period, we now have the lowest inventory and lowest receivables in the recent years.

    Guidance & targets

    5
    CategoryTargetPriority
    Volume
    2-wheeler industry growth
    8-10%
    		High
    Market Share
    Company market share
    outperform industry and continue to gain market share
    		High
    Margin
    ICE business EBITDA margin
    14-16%
    		High
    Profitability
    EV business product contribution level
    neutral
    		Medium
    Commodity Costs
    Commodity inflation
    1-2%
    		High

    EV business product contribution level

    Start of next financial year
    CurrentNegative zone
    TargetProduct contribution neutral level

    Why it matters

    Indicates progress towards profitability for the nascent EV segment, crucial for overall company margins and investment thesis.

    our gross at a product contribution level, we are still in a negative zone. So that's something is the second priority we have in terms of really getting to a product contribution neutral level.

    How to verify

    key_financials.segment_breakdown[name='EV business']

    Risks & concerns

    2
    RiskSeverity

    EV business product contribution level

    The EV business is currently in a negative zone at a product contribution level, requiring focus on cost reduction and volume scaling to achieve neutrality. — Management acknowledged

    medium

    Commodity inflation

    Expectation of 1-2% commodity inflation in Q3 FY26, which management believes will be range-bound and managed through internal programs. — Management acknowledged

    low

    Q&A highlights

    8

    “We've seen a very strong recovery in 100cc. There were a lot of fence sitters who joined the mobility space. So that has really helped the us to grow ahead of the industry in the festive. And we are seeing very strong traction around Splendor, even HF. So that has helped. Scooters have been also a very good story of growth.”

    Provides detailed insights into the impact of GST cuts on different segments and the recovery in entry-level 100cc and scooter markets, along with rural demand.

    asked by Gunjan Prithyani

    2 min read6 chapters

    Detailed Narrative

    01

    Record Financial Performance in Q2 FY26

    Hero MotoCorp achieved its highest ever quarterly revenue of ₹12,126 crores in Q2 FY26, representing a 16% year-on-year growth. This strong top-line performance translated into record profitability, with EBITDA reaching ₹1,823 crores (up 20% YoY) and PAT at ₹1,393 crores (up 16% YoY). The ICE business demonstrated significant margin expansion, with its EBITDA margin improving by 121 basis points year-on-year to 17.7%, contributing to an overall EBITDA margin of 15% for the quarter.

    02

    Robust Festive Season and Market Share Gains

    The festive season proved highly successful for Hero MotoCorp, with nearly 1 million retails recorded on VAHAN by October 25. The company's VAHAN market share expanded by 3.7% year-on-year to 31.6% in October. ICE VAHAN registrations grew 16.2% from August 23 to November 13, outperforming the industry's 14.7% growth. Market share gains were broad-based, including a 3% increase in the Entry segment in Q2 and 5% in H1, driven by new product launches and emotional campaigns.

    03

    Strategic Growth in EV and Global Businesses

    The EV business achieved its highest ever quarterly market share of 11.7%, an increase of 6.8% year-on-year, primarily due to the success of Vida VX2. Hero MotoCorp now holds over 20% market share in 48 towns and is a top 2 player in 56 towns for EVs. Concurrently, the global business demonstrated robust growth, with dispatches increasing by 77%, three times the industry growth, and expanding its presence to 52 countries, including new entries into Europe and the U.K.

    04

    Product Portfolio Expansion and Premiumization Drive

    Hero MotoCorp introduced 12 new models and variants during the festive period, contributing significantly to its market performance. Key launches like the Glamour X and Xtreme 125R in the 125cc segment, and Destini 125/Xoom 125 in scooters, have driven sequential market share gains. The premium segment network has expanded to 100 stores, covering 50% of the upper premium market, and Xpulse retail sales grew by 31% during the festival, indicating successful premiumization efforts.

    05

    Outlook and Margin Management Strategy

    Management projects the 2-wheeler industry to grow 8-10% in H2 FY26, with Hero MotoCorp expected to outperform the overall market and continue gaining market share. The company maintains its EBITDA margin guidance for the ICE business within the 14-16% range. While a 1-2% commodity inflation is anticipated in Q3 FY26, Hero plans to mitigate this through its LEAP program, cost efficiencies, and mix improvement, ensuring sustained profitability.

    06

    Leadership Transition and Sustainability Focus

    A significant leadership development was announced with the appointment of Mr. Harshavardhan Chitale as the new Chief Executive Officer, effective January 2026. Mr. Chitale's extensive global and diversified expertise is expected to guide Hero MotoCorp's future trajectory. The company also improved its Dow Jones Sustainability Index score to 75 in FY25 from 69 in FY24, reflecting its leadership in sustainable business growth and commitment to ESG initiatives.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.