Hero MotoCorp increased its total dividend to ₹185 per share in FY26, compared with ₹165 per share in FY25, reflecting a year-on-year increase of 12.1%. At the current share price of ₹4,896, the dividend yield stands at 3.8%. The company has maintained a consistent dividend payout ratio between 64% and 82% over the last five financial years, returning at least 69% of its net profit to shareholders. Hero pays dividends twice a year (interim and final) with ex-dividend dates in February and July. The company's regular dividend payout ratio has remained stable at over 69% during FY23-FY26, with FY26 specifically paying out 77% of earnings per share as dividends, aligning with its policy of distributing 68% to 77% of earnings as dividends.
According to reports from The Financial Express, Hero MotoCorp's revenue in FY26 rose by 14.9% year-on-year to ₹46,830 crore, driven by a 10% increase in overall sales volume to 64.7 lakh units. The company's net profit grew at a 14% CAGR over the last 5 years, reaching ₹5,268 crore in FY26. Hero maintains a debt-free balance sheet and operates with a return on capital employed of 34.1% and return on average equity of 25.9%. The company's market cap stands at ₹97,968 crore as of June 26, 2026. In FY26, Net profit also rose 14% to reach ₹5,268 crore, with EBITDA increasing 17% to ₹6,871 crore driven by a 30 bps margin expansion to 14.7% due to favorable product mix and cost efficiencies.
As reported by The Financial Express, Hero MotoCorp's net cash flow from operations increased 98.8% to ₹8,314.9 crore in FY26. The company maintains a strong free cash position of ₹7,321.3 crore, which has been consistently generated for at least 10 financial years. In FY26, Hero paid ₹3,501 crore in dividends, up from ₹2,799.8 crore in FY25, with these payouts fully covered by free cash flows. The company spent ₹1,005.9 crore on capital expenditure during FY26, with planned investments of over ₹1,500 crore for FY27 to expand scooter and EV production capacity. Effective management of working capital drives this cash flow, with Hero taking longer to pay suppliers (increasing trade payables to ₹1,952.6 crore) while collecting ₹1,081.2 crore from customers during the year.
According to the report, Hero MotoCorp holds the position of world's largest manufacturer of motorcycles and scooters for 25 consecutive years, serving over 13 crore customers across 53+ countries. In the fourth quarter of FY26, the company's market share in the entry-level segment reached 65%, the highest in more than a year. The company dominates the entry-level and mass-commuter categories with iconic brands like Splendor+, HF Deluxe, and Passion. Hero's EV volumes expanded 2.5 times over the previous year in FY26, with plans to double total EV production capacity before end-FY27. The company operates eight state-of-the-art manufacturing facilities (six within India, one each in Colombia and Bangladesh) with a total annual production capacity of around 94 lakh units, supported by a highly penetrated distribution network of over 11,000 customer touchpoints worldwide.
As reported by The Financial Express, Hero MotoCorp trades at a price-to-equity multiple of 18.3x, representing a discount to its 10-year historical median of 19.6x and sector median of 37.5x. The company's EV volumes expanded 2.5 times over the previous year in FY26, with plans to commence operations in Brazil and expand into new African markets. Hero plans to maintain momentum with a pipeline of launches across commuter bikes, premium motorcycles, scooters, and the VIDA brand, while targeting expansion in Bangladesh and scaling retail operations in the Philippines and Sri Lanka. The planned doubling of production capacity, along with the expansion of its retail network to more than 360 cities, is expected to improve operating leverage and reduce per-unit EBITDA losses. Management estimates it can currently service only 50% of the actual demand in the high-margin aftermarket business, with plans to invest over ₹700 crore to build a second parts plant in South India to double parts capacity.
