HEROMOTOCONSEQ4 FY'26May 11, 2026

Hero MotoCorp Limited

8,624words
108turns
10analyst exchanges
6executives
Management on call
Harshavardhan Chitale
CHIEF EXECUTIVE
Vivek Anand
CHIEF FINANCIAL OFFICER – HERO MOTOCORP LIMITED
Ashutosh Varma
INDIA BUSINESS UNIT, CHIEF
Kausalya Nandakumar
EMERGING MOBILITY BUSINESS UNIT, CHIEF BUSINESS OFFICER
Sarthak Sikka
INVESTOR RELATIONS – HERO MOTOCORP LIMITED
Aniket Mhatre
- MOTILAL OSWAL FINANCIAL SERVICES LIMITED
Key numbers — 40 extracted
rs,
coming through. And in these focus segments, we have seen advancement in last quarter. In scooters, we saw 48% growth year-on-year. In EV, our EV scooter volumes expanded 2.5x over the previous year
48%
ugh. And in these focus segments, we have seen advancement in last quarter. In scooters, we saw 48% growth year-on-year. In EV, our EV scooter volumes expanded 2.5x over the previous year. And our
2.5x
last quarter. In scooters, we saw 48% growth year-on-year. In EV, our EV scooter volumes expanded 2.5x over the previous year. And our global business, wholesale or dispatches saw growth of 41% year
41%
anded 2.5x over the previous year. And our global business, wholesale or dispatches saw growth of 41% year-on-year. Even in the premium categories, as you all know, we have partnership with Harley-
26%
in range of motorcycles and our Harley-Davidson range of bikes that we sell or make and sell grew 26% year-on-year. What's also important to note is this is not just dispatch growth. Our retail perfo
₹1,500 crore
owth segments will continue. We are investing in capacity expansion, and we have committed over ₹1,500 crores of capex in FY '27. And this capex is going to expand our capacity in scooters, where for some o
₹700 crore
going to help in further expansion of our parts and accessories business. So we've committed over ₹700 crores of investment in building out a global parts center in South of India. Second kind of investme
22%
brand building. Last year, just to call out, we increased our advertising and promotion spend by 22%. So while our overall costs were controlled and you saw its impact on our EBITDA expansion in the
3 lakh
all of our electric vehicles and premium range of motorcycles and scooters are connected and over 3 lakh of 2- wheelers that are on the road today are connected to our cloud platform, where we can monito
₹12,797 crore
rter 4 financial year '26 performance, the company achieved its highest ever quarterly revenue of ₹12,797 crores, representing a 29% year-over-year growth. This top line momentum contributed to robust operatio
29%
rmance, the company achieved its highest ever quarterly revenue of ₹12,797 crores, representing a 29% year-over-year growth. This top line momentum contributed to robust operational results with EBIT
₹1,856 crore
ine momentum contributed to robust operational results with EBITDA reaching an all-time high of ₹1,856 crores, up 31% year-on-year and PAT reaching ₹1,401 crores, up 30% year-on-year. ICE business EBITDA ma
Guidance — 20 items
Harshavardhan Chitale
opening
“And what that means is channel stock came down over the year, and we are entering next year with much more healthier channel stock levels.”
Harshavardhan Chitale
opening
“Going forward, our investments in these growth segments will continue.”
Harshavardhan Chitale
opening
“And then further down the road in a few quarters, there will be further doubling of capacity as we are seeing great momentum for our VIDA brand.”
Harshavardhan Chitale
opening
“In addition to 9 launches that we did last year, you should expect from us this year many new exciting launches, both in our VIDA brand, in our premium ranges and also in scooters.”
Harshavardhan Chitale
opening
“Already all of our electric vehicles and premium range of motorcycles and scooters are connected and over 3 lakh of 2- wheelers that are on the road today are connected to our cloud platform, where we can monitor their performance, give rider guidance such as turn-by-turn navigation, diagnostic information.”
Harshavardhan Chitale
opening
“You will be glad to know that we are now increasingly leveraging Gen AI for improving our customer conversion in our customer-facing platform and also in reducing our cycle time of development.”
Vivek Anand
opening
“We expect a transitionary impact on margins in the short term and are mitigating this through calibrated price increases and an accelerated LEAP saving program.”
Vivek Anand
opening
“We remain committed to our medium-term margin guidance of 14% to 16%.”
Vivek Anand
opening
“We are confident in the growth prospects of the 2-wheeler industry and anticipate high single-digit growth during the current fiscal year.”
Vivek Anand
opening
“With resilient demand and upcoming product launches, we expect to grow ahead of the industry.”
Risks & concerns — 10 flagged
And secondly, in the opening remarks, you talked about headwind both on the wage side and the commodity side, and we are seeing aluminum almost, I think, all-time high today.
— Binay Singh
Could you help us think that in the next few quarters, what is the quantum of headwind coming your way?
— Binay Singh
So I think it's difficult to give a number, Binay, let me start with that because things are evolving as we speak.
— Vivek Anand
And as management, we are doing whatever it takes to really mitigate the impact of that, which includes taking calibrated price increases and also accelerating our cost saving programs, right.
— Vivek Anand
But as I said, the way things are evolving, it's difficult to really commit at this point in time that how the full year is going to be.
— Vivek Anand
So looking forward in FY '27, I know it might be a difficult question to answer.
— Amyn Pirani
In Q4, how much commodity cost pressure did we face?
— Kapil Singh
Yes, it's difficult for us to really quantify any impact.
— Vivek Anand
And in terms of challenge, I would say, more of an opportunity that I see in some of these categories where higher growth is and that we spoke of.
— Harshavardhan Chitale
However, we see a sequential significant I: hero impact of over 100 bps in the gross margin.
— Shridhar Kallani
Q&A — 10 exchanges
Q
Hi team. Congrats on a good set of numbers. My first question is on your volume outlook. Could you share your thoughts on motorcycle industry volume outlook that you expect and for yourself also for FY '27? And which will be the key models driving that growth?
Harshavardhan Chitale
Thank you, Binay. Thank you for your question. As Vivek mentioned, industry expects high single-digit volume growth in FY '27. And it's a combination of both growth in motorcycles as well as scooters. Having said that, we do expect scooters to grow a couple of points more than motorcycles. So high single digit with a little less motorcycle, more in scooters. And looking at our success of some of the new launches and the plans next year, we do plan to outgrow industry both in motorcycles as well as scooters. Any key models to watch in that, which will drive the motorcycle growth for you? So we
Q
Yes. Hi. Thanks for taking my questions. Just continuing on the margin question that Binay asked, could you talk about the price hikes taken so far since the beginning of this year? And also, is it fair -- could you also share in the sense that all the price hikes that we have taken, does it largely cover for where the commodities are right now or it covers 50%, whatever is there some thoughts that you can share what is the offset that we've already managed through the price hikes taken? Harshavardhan Chitale: Yes. Thank you for the question, Gunjan. So the price hike that we've taken is close
Gunjan Prithyani
And just so maybe I'm clear, what you mentioned is high single-digit increase that you mean is high single-digit increase as a percentage of ASP or as a percentage of revenue. That's the way I should look at that number, right? 2% against maybe... Harshavardhan Chitale: Great point. So 2% was on the revenue, on the sale price, but high single digit was on the BOM cost. Okay. Got it. That's clear. And the second question, just going back to the introductory points that you made on capacity ramp-up. Could you just refresh us where we are on EV capacity, e- I: hero scooter capacity right now, whe
Q
Yes. Hi. Thanks for the opportunity. Actually, my first question is something that, sir, you mentioned towards the end of your comments on the exports. So last 2 years, we've seen a very sharp increase in our exports. So any color or guidance you can provide as to how should we think about maybe the next 12 months or maybe the next 12 to 24 months in terms of the momentum? And are there any specific markets where we are seeing any improvements? And how should we think about the development in this segment? And also, are there any near-term risks that we should think about given whatever is hap
Amyn Pirani
Great. My second question is more on the domestic demand and market share. And while it is well appreciated that in every category or most categories, you have managed to gain share last year, because of the differences in your salience in scooters and EVs, your market share -- overall retail market share still has come off a bit, even though that trend was also much better than the last few years. So looking forward in FY '27, I know it might be a difficult question to answer. How should we think about your retail overall market share and the salience? And how soon do you think that your sali
Q
Good morning, sir. Thanks for the opportunity. Sir, just wanted to understand how you think will be the pacing of growth between the 2 halves of the year because last year, we had a very strong second half and a flattish first half. So in the second half of the year, are you expecting growth on this base? Just some color there will be helpful.
Harshavardhan Chitale
So you're right. I think we do have a benefit of base effect in the first half. And hence, we do expect the first half growth to be stronger. And I think the second half will be relatively lower I: hero than the first half. So I think there is a base effect definitely that will come into play. But overall, for the full year as a whole, we do continue to see growth momentum that you have seen in our overall revenue growth of FY '26. Sir, also I had a quick follow-up on the commodity cost. In Q4, how much commodity cost pressure did we face? Yes. So Kapil, in Q4, let me just -- just a second, ye
Q
Thank you, sir, for the opportunity. Congratulations on good set of numbers. Firstly, I wanted to request your thoughts on a couple of regulations. One is that mandatory ABS regulation. And second is this draft EPR notification, which came out recently. I wanted to check what is your thoughts? What is the status currently? And what do you think can be the impact in future?
Harshavardhan Chitale
So on ABS, there hasn't been any development over the last few months. We will continue to work with government on ways and means to keep making 2-wheelers safer. But on specific ABS-related regulation draft that had come, there has not been any further development on that as of now. And on the EPR draft, Vivek, do you want to give some more details? So EPR, at this point in time, as you rightly said, it's still -- it's in evolving stage, right. So the industry is at this point in time working on in terms of how to really operationalize it, right. So -- and as you know, the pricing is still ev
Q
Yes, hi. Good morning and thanks for taking my questions. So just -- most of them have been answered. Just on the -- I mean, just a data point on spare parts sales, could you give us what is that for this quarter and the year?
Vivek Anand
Yes. So for the quarter, it's ₹1,650 crores. And for the full year, it's around ₹6,200 crores, which is almost a growth of 6% year-on-year. Okay. And just also in terms of like you've talked about a few things, but in terms of what is the total R&D spend that we had during the year? And how do you see that trending going forward? So I think we can certainly share the numbers. But in terms of trending, clearly, we are increasing our spending in this space year-on-year, right. So we can certainly offline share the details with you both in absolute and as a percentage of revenue, which I know is
Q
Thanks for taking my questions. So my first question was regarding the demand scenario. I understand you mentioned about high single-digit growth for the industry in FY '27. Just wanted to understand, if you see 3 months back also, probably we would have expected a similar kind of growth. I: hero And post that, we've seen a lot of macro headwinds in terms of sentiments around expected fuel price increase, prices increasing. So are you not expecting any dampening of that sentiment? What is driving this on-ground strength? If you could help us some texture around rural versus urban and your expe
Jay Kale
Understood. And second question is on -- historically, we've spoken about scooters and premium motorcycles being the key focus areas for us. And it's heartening to see a lot of actions being taken and yielding results on the scooter side, both on ICE and EVs. If you could just talk a little bit about some of your learnings from that category and how one could use it to further enhance your presence in the premium motorcycles because that's clearly one of the last areas where one should -- one could expect incremental market share gains? So I think our learning has been great products and good
Q
Good morning sir, thanks for taking my question. It's a sizable capex that you are planning, ₹1,500 crores. Just to understand the entire money would be only for FY '27. Is that the correct understanding?
Harshavardhan Chitale
That is right. That is, yes. Okay. And sir, if you could also share the aspiration for PAM revenue since you're targeting a second global parts center. Roughly, you've got some target in mind that it should be x percentage of vehicle sales. That would be great just to understand what the target is. And if EV volumes grow significantly, given the capacity expansion, could it impact margins at least over the near term? Or as you said, PLI would more than offset this? So these 2 questions, PAM revenue target and the impact on margins? Harshavardhan Chitale: Yes. On the PAM, if we look at our tota
Q
Hi, thanks for taking my question. So the first question is with regard to Euler. Now you have been investing consistently almost like ₹200 crores quarterly. I wanted to get how much stake you hold now end of the year? And what is the expected investment plan in FY '27 or next 2, 3 years? I: hero Harshavardhan Chitale: Yes. Maybe just to first clarify, we are not investing ₹200 crores quarterly. We closed the ₹210 crores investment as a follow-on investment to our earlier investment, but it's not a ₹200 crores quarterly investment. Could you please repeat the second part of the question?
Vivek Anand
That takes our -- so we just invested ₹200-plus crores, and that takes our shareholding to close to 37%. And what's the business requirement, if you can disclose for next 1, 2 years. This should take care -- so you're right. So Pramod, this should take care of their funding requirement for the current fiscal. Okay. Got it. And second question is with regard to the scooter portfolio. Considering the success which you have achieved on the EVs, does it still make sense to balance both ICE and EV portfolio or you could have gone overboard on the EV portfolio and keep the legacy out on building cap
Q
I just needed the clarifications. Firstly, on the gross margin side. In the last quarter, you did mention that 40 to 50 bps impact was expected in Q4. However, we see a sequential significant I: hero impact of over 100 bps in the gross margin. This is in spite of your earlier commentary that the ₹2,000 per unit commodity hike was adjusted with a similar price hike. So just wanted to understand if I'm missing something over here because there seems to be a disconnect. And in the near term also, you did mention that further commodity impact may be witnessed. So if any clarity could also be given
Vivek Anand
Thanks, Sridhar. So I'll just repeat. So during quarter 4, the material cost inflation was ₹2,100 and the corresponding revenue increase during the quarter was ₹2,000, right? So clearly, you see an impact in gross margin when you compare on a percentage basis of 100 basis points because the margin impact could not be recovered in the last quarter. And that's almost contributing to 60% of the drop in gross margin. If you see the value is covered, the cost increase is covered by price, but not the percent margin that you get on that cost. And that's what creates that margin percent impact, not t
Speaking time
Harshavardhan Chitale
24
Vivek Anand
21
Moderator
12
Binay Singh
7
Gunjan Prithyani
6
Kapil Singh
6
Sonal Gupta
6
Raghunandhan
5
Pramod Amthe
5
Sarthak Sikka
3
Opening remarks
Aniket Mhatre
Thank you, Swapnali. Good morning, everyone. Welcome to the post results conference call of Hero MotoCorp. I would like to thank the management team of Hero MotoCorp for giving us an opportunity to host this call. I will now hand over the call to Sarthak from the Investor Relations team of Hero to take this forward. Over to you, Sarthak.
Sarthak Sikka
Thank you Aniket and Swapnali. Good morning, everyone, and welcome to our earnings call. With us on the call today, we have Mr. Harshavardhan Chitale, our CEO; Mr. Vivek Anand, our CFO; Mr. Ashutosh Varma, who is the Chief Business Officer of the India Business Unit; and Ms. Kausalya Nandakumar, Chief Business Officer of the Emerging Mobility Business Unit. We'll begin the call with opening remarks from Harsh and Vivek followed by a Q&A session. And with that, let me hand over to Harsh.
Harshavardhan Chitale
Thank you, Sarthak. And good morning, everyone, and welcome to the Hero MotoCorp's earnings call. I'm sure that by now, all of you must have seen our strong Q4 and fiscal year 2026 results. FY '26 was a very strong year for us, where we delivered our highest ever topline and bottom line, while maintaining our leadership as the world's largest 2-wheeler manufacturer for 25 consecutive years. In the previous investor call, I spoke about opportunities that exist in the fast-growing segments of the 2-wheeler industry, where we are relatively under-indexed, where we are relatively underrepresented. And I also spoke of how we are focusing on them with a clear objective of rapidly gaining share in each of them. It's heartening to see the results already coming through. And in these focus segments, we have seen advancement in last quarter. In scooters, we saw 48% growth year-on-year. In EV, our EV scooter volumes expanded 2.5x over the previous year. And our global business, wholesale or dispa
Vivek Anand
Thank you, Harsh. Good morning to all of you. I would like to thank everyone for joining the call today. I'm pleased to report a strong financial performance for Hero MotoCorp for the fourth quarter and the full fiscal year 2026. Regarding our quarter 4 financial year '26 performance, the company achieved its highest ever quarterly revenue of ₹12,797 crores, representing a 29% year-over-year growth. This top line momentum contributed to robust operational results with EBITDA reaching an all-time high of ₹1,856 crores, up 31% year-on-year and PAT reaching ₹1,401 crores, up 30% year-on-year. ICE business EBITDA margin in the quarter expanded by 100 basis points year-on-year to 17%, driven by pricing, LEAP savings and operating leverage. After taking into account the investments behind EV business of ₹220 crores, the overall EBITDA margin improved by 30 bps to 14.5%. Coming to the performance in fiscal year 2026, we achieved highest ever revenue, EBITDA and PAT. Revenue stood at ₹46,830 c
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