Hero MotoCorp reported a 4.6% YoY rise in net profit to Rs 1,456 crore for Q2FY27, supported by a 21.1% revenue growth. While margins faced pressure from raw material costs, the company is aggressively expanding its EV and premium motorcycle production capacities. Axis Securities maintains a 'Buy' rating with a revised target price of Rs 6,025.
Hero MotoCorp Q2 Net Profit Grows 4.6% to Rs 1,456 Crore
Revenue stood at Rs 14,687 crore, showing a 21.1% YoY increase.
EBITDA reached Rs 1,968 crore, reflecting a 7.9% YoY growth.
Reader Takeaway: Strong revenue growth from premiumization and volume gains, tempered by rising input costs impacting sequential margin stability.
What just happened
Hero MotoCorp delivered a steady performance in the second quarter of FY27, with net sales climbing to Rs 14,687 crore. While revenue growth was strong at 21.1% year-on-year, net profit growth remained more modest at 4.6%, totaling Rs 1,456 crore. The company saw a 9.6% year-on-year increase in average selling prices, though bottom-line expansion was constrained by higher raw material expenses and lower other income compared to previous periods.
Why this matters
Investors are closely watching the company’s transition into the electric vehicle (EV) space and its premiumization strategy. Hero MotoCorp has successfully doubled its EV production capacity to 30,000 units per month as of September 2026, with ambitious targets to reach 80,000 units per month by Q2FY28. These investments are critical for the company to compete in the evolving two-wheeler market.
What changes now
Brokerage house Axis Securities has revised the target price for the stock to Rs 6,025 from Rs 6,500, citing updated valuation estimates. However, the 'Buy' rating remains intact, supported by the expectation of steady domestic demand and the upcoming launch of 3-4 premium motorcycle models under the Xtreme, Xpulse, Karizma, and Harley-Davidson banners in the second half of the fiscal year.
Risks to watch
Management highlighted potential execution risks regarding new product launches in a highly competitive premium segment. Additionally, sustained commodity price inflation remains a significant hurdle to achieving the company’s medium-term EBITDA margin goal of 14-16%. Investors should also monitor the pace of EV profitability improvements.
What to track next
The focus shifts to H2FY27, where the company anticipates a return to double-digit export growth as logistics normalize. Expansion into key international markets like Brazil, Mexico, and Africa will be a primary lever for growth in the coming quarters.