Hero MotoCorp Reports Record Revenue, EV Share Hits 11.7%, Analysts Recommend Accumulation

Hero MotoCorp reported a new record revenue of ₹12,126.4 crore for Q2 FY26, marking a substantial 16% increase compared to the same period last year. This growth was fueled by an 11.3% rise in sales volume and a 4.2% increase in realization per vehicle. The company's global business also showed strong performance.

Despite ongoing investments in its electric vehicle (EV) segment weighing on profitability, Hero MotoCorp's EBITDA margin improved by 55 basis points. This was attributed to effective cost-saving measures and stable commodity prices.

The outlook for the two-wheeler market remains positive, bolstered by a recent cut in GST rates and strong festive season demand. Hero MotoCorp is expanding its market share, achieving nearly 1 million retail sales on Vahan in October 2025 and holding 31.6% market share. Rural demand is expected to remain robust, supported by favorable macro factors and increasing consumer confidence.

The company's international operations experienced one of their strongest performances, with dispatches growing by 77% year-on-year. This expansion was driven by key markets like Bangladesh, Nepal, Sri Lanka, and Colombia, and facilitated by the launch of Euro 5+ compliant vehicles in European and UK markets.

Hero MotoCorp's EV segment is showing promising traction, capturing its highest quarterly market share at 11.7%, an increase of 6.8% year-on-year. The brand, VIDA, holds over 20% share in urban and metro markets. While the EV segment is still operating at a negative product contribution, the company is confident in its strategy and product pipeline.

With a valuation of 19 times projected FY27 earnings, the stock is considered reasonably priced. Analysts recommend accumulating Hero MotoCorp shares for long-term investment, citing strategic initiatives and growth prospects.

Impact:

This news directly impacts Hero MotoCorp's stock performance and investor sentiment. It provides a positive outlook for the Indian auto sector, particularly two-wheelers and EVs, potentially influencing investor decisions in related companies. The strong export performance also signals broader Indian manufacturing and export capabilities. The positive outlook and recommended accumulation suggest potential for growth in the Indian stock market.

Rating: 8/10

Explanation of Difficult Terms:

• Q2 FY26: Refers to the second quarter of the financial year 2025-2026.
• Revenue: The total income generated from the sale of goods or services.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance before accounting for financing and accounting decisions.
• EBITDA margin: EBITDA divided by revenue, expressed as a percentage. It shows how much profit a company makes from its core operations for every rupee of revenue.
• Basis points (bps): A unit of measure equal to one-hundredth of one percent. 55 bps is equivalent to 0.55%.
• YoY: Year-on-Year. This compares a metric to the same period in the previous year (e.g., Q2 FY26 vs. Q2 FY25).
• Volume: The number of units sold.
• Realisation: The average price received per unit sold.
• GST: Goods and Services Tax, a tax levied on the supply of goods and services in India.
• Vahan: A citizen-centric platform for driving licenses and vehicle registration, managed by the Ministry of Road Transport and Highways, Government of India. It's used to track retail sales.
• Euro 5+: Emission standards for new vehicles in Europe, indicating compliance with stricter environmental regulations.
• FY27: Financial Year 2026-2027.
• Accumulate: An investment recommendation to buy more shares of a particular stock.