Hero MotoCorp shares rallied 4% on Monday, hitting an 8-month high at ₹5,933 on the National Stock Exchange, following strong Q1 2026 results that beat analyst estimates. The stock has surged 20% in the past month, significantly outperforming the 1.4% rise in Nifty 50. In the past two trading days, the stock rallied 7% after management raised industry growth outlook to near double-digit rates for FY27, up from earlier guidance of high-single-digit growth. The company's all-time high of ₹6,390 was achieved on December 5, 2025, with current levels representing the highest since January 8, 2026.
Hero MotoCorp delivered exceptional Q1 2026 results, beating analyst estimates on both revenue and EPS, with revenue growing 35% to ₹13,126 crore and net profit at ₹1,450 crore during the April to June period. The company achieved 22.7% volume growth, significantly outperforming the sector's 14% growth rate. As reported by Business Standard, the strong performance was aided by both volume and value growth, with operating performance remaining resilient despite commodity headwinds. Analysts at Motilal Oswal Financial Services noted that margins fell only 110 basis points year-on-year to 13.3% despite sharp contraction in gross margins, with the company maintaining its 14% to 16% EBITDA margin target over the medium term.
The Indian two-wheeler industry is experiencing robust growth momentum, with Hero MotoCorp CEO Harshavardhan Chitale raising the industry growth outlook to near double-digit rates for FY27, driven by sustained GST-fuelled demand. According to the latest earnings call, Q1 2026-27 saw 14% year-on-year growth, with July recording 28% retail growth for the industry. The dramatic surge in volume sales growth followed the government's significant reduction in GST rates on automobiles in September last year. Export demand is expected to be strong, driven by expanding geographic footprint and new product launches, with the company opening Germany for ICE vehicle sales and starting Vida sales in Nepal earlier this month.
Hero MotoCorp is preparing for a significant expansion of its electric vehicle manufacturing capabilities, planning to triple EV production capacity to 45,000 units per month by FY27. According to CEO Harshavardhan Chitale, the company's EV manufacturing capacity has already reached nearly 30,000 units per month in the first week of August, with plans to add another 15,000 units of monthly capacity before the end of the financial year. The company is adding 10,000 units per month of additional capacity by the end of this month to meet strong demand. This expansion is being driven by very low dealer inventory for Vida, with the company maintaining only 2-3 days of dealer inventory depending on the region, and whatever is supplied is retailed immediately, indicating strong pent-up demand.
The country's largest two-wheeler maker, Hero MotoCorp Ltd, plans to launch its first set of electric motorcycles from 2027, becoming the second legacy mass-market two-wheeler maker after Bajaj Auto to announce entry into this segment. According to the latest earnings call, CEO Harshavardhan Chitale confirmed that the company is progressing well on its motorcycle portfolio, with plans to introduce products way before Delhi's proposed ban on internal combustion engine two-wheelers in April 2028. The company is developing two electric motorcycle platforms, including one developed in collaboration with US-based Zero Motorcycles. One motorcycle is a performance-oriented naked motorcycle, while the Zero collaboration is aimed at the high-performance segment. These will be new platforms developed with learnings from the scooter platform, but with technology suited to motorcycle consumer requirements in terms of performance, rideability, credibility, and range.
Hero MotoCorp's EV business showed exceptional growth during Q1 2026, with EV volumes increasing 151% year-on-year and EV revenue reaching approximately ₹660 crore, accounting for roughly 5% of total revenue of ₹12,999 crore. The company has expanded its VIDA electric scooter portfolio during the first quarter, launching the Vida VX2 Plus 4.4 kWh variant with an IDC-certified range of 187 km and later introducing the VX2 Go 3.1 kWh variant. Management expects both variants to contribute significantly to volumes as they gain traction. EV loss per unit improved from about ₹50,000 to ₹40,000 sequentially, with some models now turning gross-margin positive, meaning their selling price is higher than their direct production cost before other business expenses. The company received ₹48 crore in PLI benefits during Q1 and expects its entire EV portfolio to be covered by December 2026.
Hero MotoCorp is significantly expanding manufacturing capacity across multiple segments to meet growing demand. The company has added nearly 2,500 units per day of additional capacity across Vida and ICE scooters, with scooter dispatches almost doubling year-on-year in Q1. Hero has added 2,000 units per day manufacturing capacity for Splendor motorcycles (equivalent to slightly more than 50,000 units per month) ahead of the festive season, while Destini scooter capacity has been doubled and Xoom capacity is being increased by 50%. Exports emerged as another major growth area, with exports growing more than 60% in the first quarter. The company has opened Germany for ICE vehicle sales and started selling Vida in Nepal earlier this month, with plans to enter more geographies and introduce more products. Hero has implemented cumulative price increases of 4.5% on its ICE portfolio since February end, while EV per-unit price increases have been in double digits.
