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Hero MotoCorp Invests ₹1,500 Cr to Fuel EV Growth
Hero MotoCorp is investing over ₹1,500 crore for fiscal year 2027, focusing on expanding manufacturing capacity for scooters and electric vehicles (EVs) through its Vida brand. The investment also targets product development and global operations. This move follows a strong fiscal year 2026, which saw record results: ₹47,411 crore in consolidated revenue and a ₹5,742 crore net profit (a 31% increase). Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also grew 31% to ₹1,856 crore, boosted by efficiency and a strong product mix.
Vida Scales Up Amidst Fierce EV Competition
Hero MotoCorp is rapidly expanding its EV production capacity for Vida, aiming to eventually double current output of 25,000 units monthly. In fiscal year 2026, Vida achieved record retail sales of over 1.51 lakh units, nearly tripling its sales from the previous year. This growth occurs in a highly competitive EV scooter market. In April 2026, India's EV two-wheeler sales reached about 1.48 lakh units, up over 60% year-on-year. TVS Motor led with a 25% share (37,683 units), followed by Bajaj Auto (22.12% share, 32,898 units) and Ather Energy (18% share, 27,034 units). Hero MotoCorp's Vida sold 15,238 units in April 2026, a 147% increase, as it works to capture more market share.
Core Business and Global Reach Continue to Grow
Hero MotoCorp's traditional motorcycle and scooter sales continue to be a strong revenue source. In fiscal year 2026, the company sold 64.69 lakh units, a 10% increase from the prior year. Fourth-quarter sales alone rose 24% year-on-year to 17.14 lakh units, driven by demand in the commuter segment. The company is also investing over ₹700 crore in a second global center for parts, accessories, and merchandise (PAM), a segment that generated ₹6,147 crore in FY26. Hero MotoCorp's international business expanded to 52 countries, with overseas volumes up 40% in FY26. Its collaboration with Harley-Davidson also saw a 26% increase in sales.
Challenges and Market Pressures
Hero MotoCorp faces significant challenges despite its investment and performance. The overall Indian two-wheeler market is forecast to grow 7-9% in FY27, but potential weakness in rural demand due to monsoon concerns could affect sales. The substantial EV investment, though vital, may pressure profit margins in the short to medium term as Vida scales up. Competitors are actively investing and gaining ground in the EV segment. Analysts generally favor Hero MotoCorp, with 'Buy' ratings and price targets suggesting upside, but successful EV strategy execution is key for investor confidence. The stock has been volatile, trading around ₹5,321.50 on May 8, 2026, down from its December 2025 high of nearly ₹6,390. The company's Price-to-Earnings (P/E) ratio was about 18.5x as of May 2026.
Outlook and Analyst Expectations
Looking ahead, Hero MotoCorp expects the broader two-wheeler market to see moderate to high single-digit growth in FY27. Scooters are predicted to outperform motorcycles, driven by urban demand and rising EV adoption. EV penetration in the overall two-wheeler market is projected to reach 8-10% by FY27. Analysts maintain a largely positive view, with a consensus 'Strong Buy' rating and an average 12-month price target of ₹6,361.67, suggesting potential growth. This optimism reflects the belief that Hero MotoCorp's investments in capacity, products, and technology will position it well for future expansion, especially in the growing electric mobility sector.